Monday, May 18, 2009

The Numbers Behind Health “Reform”

This article by Jonathan Cohn of The New Republic provides some interesting insights behind CBO scoring of health reform legislation.  Cohn reports that Democrat efforts to draft legislation have hit two snags: 1) CBO believes that, despite taxing both businesses who fail to offer and individuals who fail to purchase health insurance, the proposal as currently written will not achieve the “universal coverage” that has been the goal of many Democrat interest groups; and 2) Because of the inter-connected nature of low-income subsidies provided through a government-sponsored Exchange, and the mandates/taxes associated with not purchasing health insurance, CBO may in fact consider health insurance premiums paid by individuals “on-budget,” meaning that health insurance would therefore become an inherent part of the federal government’s ongoing fiscal obligations.  Such a judgement, which similarly helped to doom the Clinton reform initiative in 1993/94, would confirm Republican fears that the majority is about to embark upon a Washington takeover of a health care sector that constitutes more than one-sixth of the American economy.

The article goes on to place much implicit blame on CBO for having “incorrect” or outdated scoring models, similar to the complaints made earlier this month by Finance Committee Chairman Baucus about the difficulty of finding “scoreable savings.”  While none of the sources discussing the behind-the-scenes machinations made comments on-the-record, and the situation could well change in the coming weeks, these are two noteworthy developments as Democrats try to craft a formal legislative proposal.