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From Health Law Daily, August 25, 2017

CBO director assures of agency efforts to remain impartial, avoid speculation

By Kayla R. Bryant, J.D.

The Congressional Budget Office (CBO) takes several steps to ensure that its work is objective and nonpartisan, including limiting employees’ political activities and consulting with experts who have a wide range of perspectives. The CBO Director met with Rep. Tom MacArthur (R-NJ) in July 2017 to discuss some questions related to the agency’s objectivity and analysis of the effects of the American Health Care Act (AHCA) (H.R. 1628), and in a follow-up letter to the congressman noted that some of the topics questioned were not discussed in the CBO’s AHCA report because the predictions would be too imprecise or uncertain (CBO Letter, August 24, 2017).

Objectivity. To ensure impartiality in the CBO’s reports, the agency’s analysts examine data reported by a variety of sources, including government agencies and private organizations, and commence in open discussion of issues. All reports are reviewed by employees at various levels within the organization, and are often examined by outside specialists. Experts are also consulted throughout the process and include professors, think tank analysts, and employees in various areas and levels of government. The CBO also declines to make any policy recommendations to avoid making value judgments.

AHCA estimates. The congressman had several questions about the CBO’s AHCA analysis (see AHCA amendments won’t save coverage for 23M or lower premiums for unhealthy Americans, May 25, 2015). The director explained the benchmark used for AHCA comparison involved data on recent experience and projections of how rates of coverage and insurance sources would change federal costs. The AHCA costs and savings estimates were measured relative to the CBO’s March 2016 baseline projects, which is a common approach for reconciliation legislation. The budgetary effects of such legislation are typically estimated according to the baseline underlying the budget resolution. According to the director, the agency has not had an opportunity to follow up with an analysis of the AHCA based on January 2017 baseline projections.

The director addressed the lack of an estimate of an effect on premiums for consumers in states that would obtain waivers from requirements for both community rating and essential health benefits (AHCA) by offering the agency’s conclusion that an estimate would be too imprecise. About one-sixth of the population resides in states likely to make substantial changes to regulations, and the CBO and Joint Committee on Taxation (JCT) were unable to predict how high premiums could go if insurers decide not to offer expensive policies. Although the agency avoided an estimate of the average premium in such a scenario, the uncertainty about the charges did not greatly impact the estimates of the number of consumers with coverage or the number of people who would use tax credits because the agency did not believe that many people would pay high premiums. Although the agency assessed a variety of factors to make their estimates, the CBO further believes that states’ future regulatory actions are highly uncertain and cannot make explicit predictions about which states will make which decisions.

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