Government reports often wrong
You occasionally hear someone bemoan the fact that the public doesn’t take government reports seriously. But a major reason people shrug off otherwise “alarming” reports is that so many turn out false. Consider the federal government’s recent admission that the Congressional Budget Office’s past projections on how insurance changes might affect Americans have proven bogus.
In 2017 Congress was debating repeal of the Affordable Care Act, including repeal of the penalty assessed on Americans who didn't buy health insurance policies. The CBO estimated elimination of that mandate would cause 14 million to 16 million Americans to go without health insurance.
This led the ACA’s defenders to say that repeal efforts would, literally, kill people. Yet the flaws in the CBO’s estimates were obvious at the time and have now been confirmed.
While the ACA was not repealed, Congress did do away with the insurance mandate. The Washington Examiner now reports, “In what was literally a footnote in its annual report on national health spending projections, actuaries for the Centers for Medicare and Medicaid Services ... estimated that the elimination of the individual mandate would have a significantly smaller impact than the CBO has long estimated. Specifically, the CMS report revealed that 2.5 million more people would go without insurance in 2019 due to the repeal of the individual mandate’s penalties, and the impact would be ‘smaller’ thereafter.”
In other words, the CBO overstated the impact of the ACA mandate repeal by some 540 percent. That’s not a minor mistake.
When the debate over Obamacare repeal was underway, and its defenders pointed to the CBO estimates, prudent financial analysts noted the CBO report was based on assumptions that defied common sense. Among them was the CBO’s prediction that repeal of the ACA penalty would cause 5 million people to drop out of Medicaid. You may recall that people on Medicaid pay little or nothing for that welfare program’s coverage. Yet the CBO estimated that repeal of a penalty Medicaid patients weren’t paying would cause them to give up insurance coverage they were getting free.
The CBO’s bad guess regarding the impact of the ACA mandate repeal isn’t its only failure to predict the ACA’s impact. When Obamacare was proposed in Congress, the CBO said its passage would cause the number of uninsured people to decline by 19 million in 2014. Instead, the number fell only by 9 million. At one point, the CBO estimated 22 million people would receive insurance through an Obamacare exchange by 2016, but the actual figure was proved to be less than half that.
Put simply, the CBO tends to overstate the benefits of big government programs and wildly overstate the impact of reining in those programs.
Why are people so skeptical of government reports? Maybe it’s because they’ve been paying attention.