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As the Congressional Budget Office prepares its assessment of the Republican bill to repeal and replace the Affordable Care Act, the White House is already casting doubt on the agency’s credibility.
During a segment on ABC’s This Week, White House Office of Management and Budget director Mick Mulvaney pointed to the CBO’s track record on the ACA as evidence that the agency isn’t capable of assessing a large piece of legislation.
"If the CBO was right about Obamacare to begin with, there'd be 8 million more people on Obamacare today than there actually are," Mulvaney said March 12. "So, I love the folks at the CBO, they work really hard. They do. Sometimes we ask them to do stuff that they're not capable of doing."
This talking point has been popping up a lot in the last week.
Gary Cohn, the director of the White House National Economic Council, painted a less-than-rosy picture of the CBO’s track record on Fox News Sunday on March 12. In addition, at a March 8 press conference, White House spokesperson Sean Spicer, said "If you’re looking at the CBO for accuracy, you’re looking in the wrong place."
Mulvaney has a point that the CBO’s projections for how many people would gain coverage through the ACA was higher than reality, but that criticism isn’t enough to undermine its ability to analyze the Republican repeal-and-replace bill.
CBO predictions versus reality
The CBO — the nonpartisan number-crunching arm of Congress — released enrollment projections for the health care law in March 2010. It estimated that 21 million people would purchase coverage through the new insurance exchanges by 2016.
At the end of 2016, more than 11.5 million individuals actually signed up for 2017 coverage, according to the Centers for Medicare & Medicaid Services.
That’s a difference of 9.5 million enrollees, even more than the figure Mulvaney provided.
It's also possible Mulvaney was referring to CBO's March 2010 estimate of the reduction in the number of uninsured people. The CBO predicted 30 million fewer people would be uninsured in 2016 because of the ACA. However, in March 2016, the CBO reduced its estimate of the same quantity to 22 million.
That's a difference of 8 million people on the mark.
Still, experts said CBO’s forecasts were reasonable at the time.
"With respect to precise quantitative point estimates, the differences between CBO's estimates and actual experience are well within the range that I would expect given the scope of the change CBO was being asked to analyze," said Matthew Fiedler, a fellow with the Center for Health Policy in Brookings' Economic Studies Program.
Fiedler also noted that CBO's "big picture" assessment of the impact of the ACA on insurance coverage was on point. Specifically, the agency estimated a significant decrease in the number of people without health insurance that would leave the uninsured rate at a historic low, which is what occurred, he said.
In addition, the figure ignores the fact that the 2010 prediction couldn’t account the Supreme Court decision about Medicaid expansion that allowed each state to decide for itself. Nineteen states have refused to expand Medicaid eligibility.
According to a 2015 report from the Commonwealth Fund, the CBO overestimated enrollee total, but still offered projections closer to reality than four other forecasters (the Office of the Actuary of the Centers for Medicare and Medicaid Services, the RAND Corporation, the Urban Institute; and the Lewin Group).
Importantly, the CBO reduced its projection of how many people would get health insurance this year through the Affordable Care Act’s marketplaces, from 21 million to 13 million. Initially, CBO analysts believed exchange enrollment would be higher in part because employers would drop insurance plans in favor of the marketplaces. That has not occurred.
‘They’re not capable’
Just because the CBO overestimated one measure of the Affordable Care Act in the past is not a reason enough to believe that they will miss in the same direction in the future, Fielder said.
In fact, the CBO continuously adjusts their projections to incorporate new data, research, and experience, so if anything they shouldn’t repeat the same mistakes.
With respect to the House bill, the CBO has the advantage of having just seen how implementing the ACA impacted insurance coverage.
"That experience will be particularly helpful in evaluating the effects of rolling back provisions of the ACA, meaning that, if anything, one should probably expect estimates of this legislation to be more accurate than CBO's estimates of the effects of enacting the ACA," Fielder said.
No prediction will ever be perfect, but for the most part, experts who have studied the CBO have found their projections to be largely sound.
For example, the National Tax Journal in 1988 concluded that short-run projections from the CBO do not contain bias. A 2000 report comparing the forecasting of the CBO and the Federal Reserve Board concluded that, "The most accurate forecasting is done by the CBO, with the Fed a close second."
Even the CBO released its own report in November 2015 that looked at how accurate their predictions have been, as well as what factors have contributed to forecasting errors.
On average, between 1982 and 2014, the CBO overestimated two-year revenue forecasts by 1.1 percent and six-year projections by about 5.3 percent.
Mulvaney said, "If the CBO was right about Obamacare to begin with, there'd be 8 million more people on Obamacare today than there actually are." Mulvaney went on to say that the CBO may not be capable of assessing the GOP’s replacement plan.
The initial CBO analysis of the Affordable Care Act did forecast that more people would participate in health care exchanges than actually did, but the CBO has revised those estimates. Moreover, independent analyses, as well as experts agree that the CBO offers some of the best estimates given the information available at the time.
Mulvaney’s statement is partially accurate, but misses context that would give readers a different picture of the CBO. We rate this claim Half True.
Email exchange, Steven Cheung, White House spokesperson, March 12
Email exchange, Deborah Kilroe, CBO Associate Director for Communications, March 12
Email exchange, Matthew Fiedler, a fellow with the Center for Health Policy in Brookings' Economic Studies Program, March 12
Congressional Budget Office, "Manager's Amendment to Reconciliation Proposal," March 10, 2010.
ABC News, "'This Week' Transcript 3-12-17: Mick Mulvaney, Sen. Tom Cotton, Rep. Adam Schiff, and Rep. Elijah Cummings."
Centers for Medicare and Medicaid Services, "Health Insurance Marketplaces 2017 Open Enrollment Period: January Enrollment Report," Jan. 10, 2017.
New York Times, "Budget Office Sharply Cuts Health Exchange Estimate," Jan. 25, 2016.
New York Times, "Fact Check: Spicer’s Pre-emptive Attack on the Nonpartisan C.B.O." March 9, 2017.
CBO, Revenue Forecasting Record, November 2015
The University of Chicago Press Journals, Abstract: "Accuracy and Bias in Macroeconomic Forecasting by the Administration, the CBO, and the Federal Reserve Board," Summer 2000
Jstor, National Tax Journal, "The Accuracy of Government Forecasts and Budget Projections." 1988
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