Scoring the Mandate

by Yuval Levin

Some Republicans in Congress have advanced the idea of including a repeal of Obamacare’s individual mandate in the tax bill now being developed. This would both achieve a policy goal Republicans have been after for the last few years and make available more money to be used as an offset for tax cuts. 

Republicans have long been critical of the way CBO has scored the coverage effect of the mandate, arguing that the agency vastly overstates the effectiveness of the mandate, and therefore vastly overestimates the coverage loss that would result from repealing it. I’ve advanced this view myself (here for instance). I think CBO’s score of the mandate, which played such an important part in this year’s health-care debates, is basically indefensible in light of the evidence of the past few years and the academic literature on the subject. That would mean, though, that the agency’s conclusion that repealing the mandate would make available several hundred billion dollars in savings is also indefensible, since it’s a direct consequence of the coverage-loss projection.

So although the scale of coverage loss predicted as a result of repealing the mandate is unlikely to materialize, the scale of savings that some Republicans now want to use to offset tax reform is also unlikely to materialize. Both only exist in the imaginary universe created by the Congressional Budget Office. But fiscal debates in Congress also exist in that universe, and so some Republicans now want to make the most of that usually troublesome fact—claiming the money (while presumably somehow disclaiming the coverage losses) to ease the way for tax reform.  

In an effort to do that, they have asked CBO to give them a new savings number, and so re-score a repeal of the individual mandate. In a blog post at CBO’s website this afternoon, the agency’s director, Keith Hall, announced that such a score will be coming later today and that it will be in the same neighborhood as other recent CBO scores of the mandate, making available $338 billion over 10 years. But then Hall drops this bombshell about the way CBO and its companion agency the Joint Committee on Taxation think about health care:

The agencies are in the process of revising their methods to estimate the repeal of the individual mandate. However, because that work is not complete and significant changes to the individual mandate are now being considered as part of the budget reconciliation process, the agencies are publishing this update without incorporating major changes to their analytical methods.

This effectively confirms what many in the health-policy world have been hearing in recent weeks: That CBO is completing a major re-evaluation of its approach to the individual mandate, and that when it’s finished in the next few months it will mean that CBO dramatically reduces its assessment of the mandate’s effectiveness, and therefore of the coverage losses and cost-savings involved in repealing it. After its score of the mandate’s coverage effects basically killed Republican efforts to replace Obamacare this year, CBO apparently plans to acknowledge that actually ending the mandate wouldn’t result in all those many millions of people losing coverage after all. 

I’m not inclined to the most conspiratorial readings of the timing of this change. CBO moves slowly, it is responding to pressure from its panel of outside health advisers (which met to discuss this subject in mid-September), and is responding as well to a change that has been building in the academic literature in recent years. But the agency has certainly been tenacious in defending its approach to the mandate despite this growing evidence, and stood its ground throughout the various iterations of the health-care debate this past year. 

When its new numbers come out, if they in fact do involve a significant downscaling of its estimates about the mandate, CBO should be prepared for an enormous backlash. And it should be prepared not simply to defend itself but to respond seriously to justified complaints about how a fundamental analytical error, like the one they have made and persisted in for so long regarding the mandate, can distort our policymaking processes in ways that have huge implications for how our government works. 

Too much of American self-government now happens in that imaginary universe that the CBO creates (and is, to be fair, required by law to create). At the very least, it is time to think about requiring much greater transparency from Congress’s scorekeepers—at least the kind of transparency that academic social scientists now routinely expect of one another when it comes to making data and modeling widely available for review and criticism. CBO and JCT now provide nowhere near that kind of transparency, and the case for their continuing to do business this way gets weaker all the time. 

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