Cato’s Michael Cannon has been arguing for months that Congressional Budget Office estimates have not been measuring the full price tag of Obamacare, because they aren’t taking into account the private sector costs of components such as the insurance coverage mandate. Back in 1994, the CBO did include such costs in its estimates of the Clinton proposal — and such provisions accounted for 60 percent of the total cost of the legislation.
Today, Cannon points to a CBO memo that was released with little fanfare over the weekend, and calls it the “smoking gun” showing that there has been a concerted effort among Democrats to make sure the CBO does not start taking into account the cost of mandates and new regulations.
The memo concerned a proposal by Sen. Jay Rockefeller — reportedly part of the now defenct Medicare expansion “deal” reached last week — that would require insurance companies to spend 90 of the money collected in premiums on medical claims. Their conclusion was: “In CBO’s view, this further expansion of the federal government’s role in the health insurance market would make such insurance an essentially governmental program, so that all payments related to health insurance policies should be recorded as cash flows in the federal budget.”
In other words, adopting such a measure would have forced the CBO to begin to measure the private sector costs of certain elements of the bill, making it unlikely to be adopted.
“The Medical Loss Ratios memo is the smoking gun,” Cannon writes. “It shows that indeed, Democrats have been submitting proposals to the CBO behind closed doors and tailoring their private-sector mandates to avoid having those costs appear in the federal budget. Proposals that would result in a complete cost estimate — such as the proposal by Sen. Rockefeller discussed in the Medical Loss Ratios memo — are dropped. Because we can’t let the public see how much this thing really costs.”