The Treatment

Wanted: Talmudic Scholar To Read Cbo Briefing

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A new briefing from the Congressional Budget Office is full of serious political implications for health care reform. But you may need a Talmudic scholar to figure out what those implications are.

The briefing isn't about how much health reform will cost. Rather, it's about how the CBO will describe those costs.

In the reform schemes under consideration, most people will be getting health insurance from private sources. Either they'll be getting coverage directly from their employers, as many do now, or they'll be buying insurance individually (or as families) through a new, regulated marketplace that looks something like the system federal employees now use. (Insurance would be aviable to everybody, regardless of medical condition, at community rates; all insurance would have to include certain benefits; and so on.)

The question at hand is how CBO should consider those payments for accounting purposes. In particular, are those payments to insurers purely private transactions, with which CBO needn't concern itself? Or are they really part of the government's revenue stream?

It's a matter of semantics, yes, but one that could change the political discussion about reform. If those payments are part of the government revenue stream, it will--in theory--give critics more ammunition to assail reform as an expansion of government requiring huge tax increases.

During the Clintoncare fight of 1993 and 1994, CBO decided to count payments for private insurance as part of the federal revenue stream, since--under the Clinton plan--the government was requiring people to get insurance and the insurers themselves were highly regulated through government agencies. In recent weeks, reformers in the administration and on Capitol Hill have worried that CBO would rule similarly this time. (For more on this, see my recent article about the CBO and its role in this year's health debate.)

So have they? Well, it's not clear. In the director's blog, Doug Elmendorf seems to indicate there are two ways to keep private premiums off of the public books: By enacting a plan that has no requirement that people buy insurance OR by enacting a plan with such a requirement but only very loose regulations on private insurance.

But neither the blog entry nor the actual briefing are terribly specific about what constitutes loose regulations and what, exactly, would count as such a requirement. (If there's no legal requirement to get insurance, but very high late enrollment fees, would that count?)

Other passages in the briefing are simlarly vexing and, for what it's worth, the reactions I've gotten from insiders familiar with the report have ranged from sighs of relief to statements not suitable for a family blog.

I'll try to get some clarity on this in the next day or so. In the meantime, feel free to read the material yourself.

Update: I feel like I need to emphasize something. This briefing says absolutely nothing about how much reform would actually cost or which types of reforms would work best. It's about names in an accounting book and nothing more. 

--Jonathan Cohn

 

 

 

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