CBO’s healthcare report shows value of good analysis

For the past seven years, I have run a master’s in public policy (MPP) program. Each year, as we teach the students basic research methods, microeconomics, program evaluation and benefit-cost analysis, I hear one question over and over again: “Will anyone use the work we do, or is it ‘all politics”?”

Never has that question been harder to answer than in the highly polarized and politicized climate of the past year.

Recently, however, those of us who advocate for good analysis in government got some encouraging news. The Congressional Budget Office (CBO) published an estimate of the impacts of the Republican healthcare legislation being debated in the House of Representatives (aka “RyanCare” or “TrumpCare”). The CBO produced its analysis in a remarkably short period of time. The agency estimated that 24 million people would lose health insurance and that premiums for insurance plans would eventually drop.

The terms of the debate on the healthcare legislation changed immediately. Gone were the empty claims that no one would lose their health insurance as a result of this legislation.

{mosads}While the CBO estimate of 24 million is indeed just an estimate, and the exact number of people who would lose health insurance is uncertain, the CBO leaves no question that the number is far far greater than zero. In fact, the publication of the CBO report led to a leak that the president’s own staff estimated the number as 26 million.

Now the defenders of the bill, such as Speaker Paul Ryan (R-Wis.), have had to change their argument regarding its impacts. Ryan now argues that the bill will increase freedom and choice for Americans (well, at least for those who can still afford health insurance).

Now the policy question in the bill is correctly framed. Is it worth depriving millions of access to health insurance in order to increase the freedom to choose not to buy health insurance for others?

This tradeoff is a fundamentally political question. We use politics to solve questions of redistribution within society. The Republican healthcare plan, as made clear by the CBO report, is a redistribution of welfare from older sicker people to younger healthy ones.

It may very well be that this bill or (more likely) a modified version of it passes Congress. But if this takes place, those who vote for it will be telling their constituents that they are OK with this redistribution.

If the bill fails because Republicans do not feel comfortable voting for this tradeoff, the CBO analysis will be a big part of the reason. If the bill is modified to soften the blow on recipients of Medicaid or others hurt by the legislation, the CBO analysis will be a big part of the reason.

And the next time my students ask whether policy analysis or economics can make a difference, I will have a new example to give them.

Stuart Shapiro is professor and director of the Public Policy Program at the Bloustein School of Planning and Public Policy at Rutgers University, and a member of the Scholars Strategy Network.

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