Jack Crowe on May 25, 2017
The dominant narrative in the media is that some 23 million Americans will lose health care coverage if Obamacare is repealed and replaced with the AHCA (American Health Care Act) but the reality is the vast majority of the 23 million already don’t have coverage.
— The Hill (@thehill) 24 May 2017
BREAKING: CBO estimates 23 million people will lose health insurance over next 10 years under American Health Care Act
— NBC News (@NBCNews) 24 May 2017
Nineteen million of the 23 million people said to be losing their coverage don’t currently have coverage, according to Forbes. The Congressional Budget Office arrived at that number by assuming many millions of people who don’t have coverage now but are predicted to gain coverage under Obamacare by 2026.
These misguided projections are the result of a combination of factors including an outsized faith in the influence of Obamacare’s individual mandate, overconfidence in the number of states that will seek to expand medicaid in the next few years and a reliance on demonstrably false 2016 projections of future exchange enrollment.
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When Obamacare passed in 2014 the CBO projected that 21 million Americans would enroll in the program’s exchanges by 2016, the real number ended up being about 10 million. Astonishingly the CBO continues to rely on the March 2016 “baseline” which was still off by millions.
The CBO’s 2016 projections estimate 18 to 19 million people will enroll in the Obamacare exchanges by 2026, when in reality enrollment is declining and will probably stabilize around 10 or 11 million, according to the Foundation for Research on Equal Opportunity.
In addition to the sizable error in future enrollment projections, the CBO also overestimates the impact of repealing the individual mandate. They project that 5 million people would withdraw from medicaid coverage in 2018. This estimate assumes that almost a third of the 14 million people that choose to go uninsured in 2018 were only previously insured because of the individual mandate.
That projection does not square with the actual percentage of medicaid recipients who chose to sign up primarily because of the individual mandate, which insurers and actuaries say is around 5 percent.
Even if these projections weren’t extremely skewed, the use of the term “lose” to describe people voluntarily opting out of plans that the government no longer requires them to participate in is very misleading.
In addition to the misrepresented impact of repealing the individual mandate, the claim that 23 million people would lose insurance assumes that a number of states which have intentionally declined to expand Medicaid will do so soon.
States that haven’t expanded medicaid coverage under Obamacare have done so because they aren’t willing to expose their tax payers to an increasing liability that the federal government may try to distance itself from in the coming years. They aren’t likely to change their calculations on this point. As a result, the CBO projection that medicaid participation will see an increase of 5 million by 2026 likely overestimates participation by as much as 3 million.
When you add up the projection errors from future exchange enrollment, overestimating the power of the individual mandate and medicaid state expansion, you account for 19 million of the 23 million people who will, according to many media outlets, lose their coverage.
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