First, are they poor work products since it is easy to look back at the estimates made in the December 19, 2009 letter and see that the forecasted estimates of a reduction in the deficit and number of individuals who receive insurance coverage were not correct?  Does that mean that the work product dated June 26, 2017 is of little value? 

Secondly, did the team at CBO and JCT get it wrong in their 2009 letter because of faulty assumptions, and does this create a situation where future estimates lack credibility? 

Lastly, why is it so difficult to forecast the impact on the deficit and nonelderly uninsured residents? 

Believe it or not, these are not poor work products, nor did the team use faulty assumptions.  The CBO and JCT are pressed into an unfortunate position to forecast the behavior of the consumer (broadly defined to include employer and employees) and insurance carriers in the health insurance marketplace given a series of changes in regulations, in tax policy, in enforcement or compliance, and creation of new purchasing channels. 

These work products could not forecast with any precision and the resulting impact is that both political parties take from those work products the short statements made in the reports and turn them into headlines and talking points to sway the public to their ideological position. 

What to do?

There needs to be greater precision in the language used in all reports related to this legislation.  Specifically, the policies are not addressing health care or the health care delivery system. Instead, the policies are attempting to reform the insurance marketplace.  If the politicians would like to reform health care and/or the health care delivery system, then the policies would need to focus on areas such as the cost of medical services, the cost of pharmaceutical drugs, the health of the patient, and the compliance or non-compliance of the patient. This is by no means an exhaustive list. For example, implementing wage controls on the providers and price controls on the cost of services in the hospital and pharmaceutical industry — similar to other industrialized countries (Europe, Australia and Canada, for example) — would address critical drivers of cost which feed into the development in the insurance premium that consumers pay. 

Additionally, in the proposed legislation increasing access to insurance products — such as selling across state lines or encouraging small employers to band together to build larger purchasing pools — as well as incentives or credits to purchase insurance products to build larger pools, plus the development of high-risk pools, as well as the general aging of the population that will demand more health care resources, there will be upward pressure on costs. All of these forces impact the stability of insurance premiums in the future. 

Lastly, these policies have largely excluded input from the State Insurance Commissioners who are closest to the situation within the state. Their input would be valuable. 

The most telling statement from the June 26, 2017 report is on page nine in which the "CBO and JCT have endeavored to develop budgetary estimates that are in the middle of the distribution of potential outcomes. Such estimates are inherently inexact because the ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals and other affected parties would respond to the changes made by this legislation are all difficult to predict. In particular, predicting the overall effects of the myriad ways that states could implement waivers is especially difficult." Further on, "CBO and JCT projections under current law itself are also uncertain." 

Conclusion

These forecasts are, by admission, in the middle of the distribution of all possible outcomes rather than definitive; therefore, these reports are of very limited directional or of policy value. So why produce them? If legislators wish to truly reform the insurance markets and develop affordable premiums, the creation of high-risk pools and providing incentives to build larger insurance pools is a sound strategy. But until the cost drivers in health care are addressed, the insurance markets will continue to fail to meet the expectations of consumers and legislators.