Saturday, March 17, 2012

Pricing Obamacare & the trouble with projections

It's often difficult to understand what a social program costs each year or over the years, and it seems that the science of projecting these costs stumps even those who apparently ought to know better...or, from an alternate view, the difficulty creates political opportunities for those who would sway us one way or another regardless of what the projections suggest.  I discussed the anti-Obamacare litigation earlier; it seems that fuel is being added to the fire as commentators take apparently opposite views of the CBO's recent modification to the projected cost estimates.

An article in the Hill tells us "CBO says Obama's latest budget would add $3.5 trillion in deficits through 2022" and then confuses us mightily.

Krugman pulls the article apart and suggests that this is not just poor reporting but an attempt to spread misinformation, since "What the CBO report actually says is that it expects deficits to be a bit smaller than Obama projects."

He adds that "people who can’t read numbers making dumb claims about Obamacare," with a link to Johnathan Cohn, who says "No, Obamacare’s Cost Didn’t Just Double. Sigh".  (Cohn, it appears, is also tired of trying to reason with you people.)  Cohn says:
Sorting through the deceptive attacks on health care reform gets old, even for me. But on Wednesday the Republicans and their allies made a claim so obviously misleading that they, and the media outlets parroting them, must have known they spreading false information. 
...If CBO had truly determined that health care reform’s cost will be twice the original estimates, it would be huge news. But CBO said nothing of the sort. 
...The real news of the CBO estimate is that, according to its models, health care reform is going to save even more taxpayer dollars than previously thought. 
I want to be clear about something. The Affordable Care Act has flaws: Among other things, it reaches fewer people and provides less financial protection than I would prefer. The revised CBO report actually suggests this problem will get mildly worse, since it also expects slightly fewer people to end up with insurance. That’s one reason why the law will cost less; it’s helping fewer people. Another reason is that more employers pay penalties for not offering insurance and more people pay penalties pay penalties for not obtaining it. That’s obviously not great, either.
Cohn explains more about how to understand budget projections, worth reading.

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