Painting By Numbers – The Congressional Budget Office scoring of the American Health Care Act

I’ve been posting at my Facebook author page regular supplements to the examples from everyday life I use in Painting By Numbers: How to Sharpen Your BS Detector and Smoke Out the Experts. I figured it would be smart to post them here too. Here’s one from this week.

It’s always instructive to study the source when controversy swirls. I just read the official Congressional Budget Office (CBO) “scoring” of the Republican American Health Care Act (AHCA). While the “numbers,” $330-billion (reduction in federal deficit) and 24-million (forecasted number of uninsured Americans by 2026) are getting the headlines, the real conclusion of the report is this:

“…the great uncertainties surrounding the actions of the many parties that would be affected by the legislation suggest that outcomes of the legislation could differ substantially from some of the estimates provided here. Nevertheless, CBO and JCT are confident about the direction of certain effects of the legislation. For example, spending on Medicaid would almost surely be lower than under current law. The cost of the new tax credit would probably be lower than the cost of the subsidies for coverage through marketplaces under current law. And the number of uninsured people under the legislation would almost surely be greater than under current law.”

It’s that word, “direction,” I call to your attention. Those who pay economic modelers usually want hard numbers and ranges and low, high, and average scenarios. But most modelers will tell you that all they are able to provide with much confidence, especially on something like legislation affecting 1/6 of the US economy, is a few “directional” conclusions.

The CBO is bi-partisan so I am assuming they didn’t start with the answer (the AHCA is better than Obamacare!) and work backwards, commandment 11 in Painting By Numbers. However, you should more strongly consider commandment 6, understand the business model. The role of the CBO in this case is to provide “quantitative cover” for a controversial and convoluted piece of legislation. This helps legitimize the effort in the minds of politicians and us citizens, but how much the analysis informs the debate is questionable at best.

Here’s the original CBO report: https://assets.documentcloud.org/documents/3516452/CBO-Health-Care-Cost-Estimates.pdf