By Dan Calabrese ——Bio and Archives--March 14, 2017
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But there are more than a few reasons to doubt CBO’s fortune-telling, especially in health care. Precisely because its models give too much weight to government coercion and too little to free markets, its projections have often missed the mark. In February 2013, CBO predicted that ObamaCare enrollment in the individual market would be 13 million in 2015, 24 million in 2016 and 26 million in 2017. The actual enrollment for those years were, respectively, 11 million, 12 million and 10 million. As recently as March 2016, CBO was projecting an enrollment boom of 15 million for this year.
CBO also failed to predict how many people would game ObamaCare’s insurance rules and mandates, signing up for coverage just before they need expensive procedures like knee replacements then dropping coverage. On paper they shouldn’t behave that way, but the real world works differently than CBO’s models. CBO was also badly wrong about the 2003 Medicare prescription drug benefit, which unlike ObamaCare used incentives, markets and private competition to control public costs. The drug benefit cost about 40% less over its first decade than CBO projected.On top of this, the CBO even admits in its score of the AHCA that most of those going from insured to uninsured will be doing so because of the end of the individual mandate. In other words, they're going to become uninsured by choice. They only reason they're buying insurance now is because they're threatened with a fine if they don't. Whether they prefer not to buy it because they don't think they can afford it, or because they don't think it's a good value (and for many people, both are true), the fact remains that fewer people buying a product they don't want to buy is not bad news. But there are other problems with the CBO's score. One is that it assumes nothing else will change in insurance markets after the bill passes. This is classic CBO, by the way. Laws are passed for the purpose of changing things. The CBO scores the bill as if nothing will change in terms of how people behave and how markets work.
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