CBO Projections of Coverage under the ACA

We all know that the CBO has been under assault over the recent scoring of the AHCA (14 million reduction in coverage by 2018, 26 million by 2026; relatively unchanged by recent amendments), with allegations that their previous projections have been “wrong”. I document in this post that CBO macro projections have been comparable to Blue Chip averages, in terms of accuracy (mean bias, RMSE’s). In terms of the issue at hand, here is a graph depicting various vintages of CBO projections of reduction in uninsured.

Source: WaPo via Daily Kos.

Now, a cursory glance might suggest to the uninformed that indeed the CBO blew it, since as of March 2016, coverage had fallen by about 8 million less than projected in March 2010. However, if one examines the profiles of the various vintages, one sees a big shift between July 2012 and May 2013 vintages. What happened in the intervening period? A hint is the fact that the Supreme Court decision striking down the requirement for Medicaid expansion occurred June 28, 2012. By May 2013, the implications of that event had become clear, with 19 states declining to expand their programs.

The Kaiser Family Foundation estimated that about 4.5 million nonelderly adults would be eligible if these 19 states expanded coverage. Hence, the miss is on the order of 4 million, which is not altogether big given the original estimate of a 32 million reduction in uncovered: 6% in log terms. (Even more impressive when compared against the approximately 246.6 nonelderly covered, in 2015 [1]).

So, in the end, I think the consensus of informed economists is correct: “Adjusting for legal restrictions on what the CBO can assume about future legislation and events, the CBO has historically issued credible forecasts of the effects of both Democratic and Republican legislative proposals.”

4 thoughts on “CBO Projections of Coverage under the ACA

  1. joseph

    Well, it looks like Obamacare has dodged a bullet for now, but Trump has a lot of ways he can sabotage it. Refusing to enforce the insurance mandate. Refusing to pay for the insurance risk corridors. Refusing to pay the cost sharing reduction. Waivers on Medicare expansion for Republican states.

    Many of these are likely to end up in the Supreme Court which is why Democrats would be wise to filibuster Gorsuch, who is even more extreme than Roberts, Alito, Scalia and Thomas on these issues.

  2. D. F. Linton

    A ‘credible’ forecast is not equal to an ‘accurate’ or ‘useful’ forecast.

    Many people, not the least their producers, consider horoscopes ‘credible’…

  3. Beeker

    I was analyzing the CBO’s report on the AHCA and the resulting comments from various administration officials and others. What people forget is that the CBO analyzes the effect of the legislation assuming that the states will expand to provide coverage and people comply with the mandate. It does not take into account of states not expanding because the SCOTUS made the Medicaid expansion optional, legal suits and political forces spreading falsehood.

    The CBO is under a legal restriction not report on the effect on the LT deficit when taking into account of the ACA replacement.

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