A recent bit of misinformation that’s floating around, promoted by opponents of Obamacare, is the false claim that new Congressional Budget Office (CBO) estimates show that it will cost a lot more than originally estimated.
There are two main problems with this claim.
One is that the CBO in fact says that their new estimate shows lower costs than originally estimated, not higher costs.
This is laid out in several CBO reports. Report 43080 states:
The Estimated Net Cost of the Insurance Coverage Provisions Is Smaller Than Estimated in March 2011
CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of just under $1.1 trillion over the 2012-2021 period-about $50 billion less than the agencies’ March 2011 estimate for that 10-year period.
Second, opponents compare two estimates that don’t measure the same thing.
These individuals start with the CBO’s ten year estimate from the time the bill was passed. They then compare it to a second ten year estimate starting now. Since it’s two years later, the second estimate includes different years.
Because the two estimates don’t cover the same years and the program is being implemented over a number of years, the cost for the two different time periods is different.
But that doesn’t mean the CBO is saying that the cost is higher for the overlapping period of time.
In fact, as discussed above, the CBO states that for the same exact years, the cost is projected to be LOWER.
Overlapping years, a metaphor:
This is not a perfect metaphor for this, but imagine that a doctor is asked to estimate the weight of a baby for each year on her birthday up to ten years old. Then two years later the doctor is asked to estimate the weight of this two-year old for each year on her birthday up to twelve years old.
Both estimates would be ten year estimates.
The first estimate would include the weights of a newborn and one year old but not an eleven year old and a twelve year old. The second estimate would include the weights of eleven year old and a twelve year old but not a newborn and a one year old.
And if you totalled each annual weight number, the second estimate would be higher, even if the weight estimates were exactly the same for the same exact years, when the child is between two and ten years old.
Now, with regard to the CBO’s health care estimates, it is unclear why opponents of Obamacare are promulgating this false budget story.
Either they are lying to people or don’t understand what’s really going on. If they misunderstood, it may be because they haven’t read the documents spelling out the new estimates and instead have relied on news reports that were themselves misleading.
Whatever the case, the most recent CBO estimate is that Obamacare will cost $50 billion less for the same period than originally estimated.
Thus it’s clearly incorrect to say things like:
The CBO’s revised cost estimate indicates that this massive government intrusion into America’s health care system will be far more costly than originally claimed. [via source]