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Here We Go Again: How To Read Those Help Numbers

Is it possible that everybody is misinterpretating the Congressional Budget Office's estimate of the Senate HELP bill...again?


So far I've seen two different set of interpretations. One, the most common, is that the HELP committee figured out how to cover almost everybody--97 percent of the population--while requiring around $600 billion in outlays. (Woot woot!)

The other is that the Senate HELP bill means reform is still leaving out 20 to 30 million people, while raising the deficit by $600 billion. (Boooooo.)

Which one is right? Neither, actually--although, in fairness, it's a bit complicated. (I'm not sure my original item yesterday made it fully clear.)

Here's the story. By rule, the HELP bill deals only with areas of legislation over which HELP has jurisdiction. So there are provisions to create an insurance exchange, through which people can buy coverage, and to provide people buying coverage through that exchange with subsidies. There are also provisions imposing a financial penalty upon employers who don't insure their workers. And there is a public plan.

CBO looked at this and decided that the package, by itself, would reduce the number of people without insurance by around 20 million people in 2019, leaving another 34 million uninsured. It would also result in a net outflow of funds--that is a higher deficit--of $600 billion. 

Now, if you wanted to write a story, you could simply repeat that last line--less than half the uninsured covered, higher deficits of $600 billion--and the story would be technically accurate. But it would also be wrong.

After all, you're interested in the HELP bill because it's a vehicle to enact health care reform. But health care reform necessarily involves a few more pieces--pieces outside of HELP's jurisdiction.

In particular, there's going to be a substantial expansion of Medicaid, which will cost money. There will also be reforms to Medicare and Medicaid that save money. And that's in addition to whatever new revenue reform claims, whether in the form of cap on the employer tax exclusion, President Obama's proposal for itemized deductions, or some other resources.

Since we have a pretty good idea of the size of the Medicaid expansion, we can estimate its impact very roughly. It should reach somewhere in the neighbrohood of another 20 million people. Throw that into the mix, and suddenly HELP's bill reaches more than 40 million people, leaving less than 20 million--many of them undocumented workers--uninsured by 2019. That would mean 95 percent of people living here, 97 percent of people who are here legally, would have insurance.

That's why a lot of people are running with the headline, 97 percent covered for just $600 billion.

But that's wrong, too. If you want to factor in the coverage effects of the Medicaid expansion--which, again, is being done by another committee--then you need to factor in the cost effects too. That will probably inflate the program's total outlays to somewhere between $1 and $1.3 trillion--which, by the way, is more or less what experts have been saying all along.

Of course, insofar as you're describing the total package--i.e., including elements not in HELP's language--you should also give credit for that few hundred billion dollars in Medicare and Medicaid savings, plus enough new revenue to offset the rest because all the relevant committees, plus President Obama, have pledged to keep the measure budget netural over ten years.

So what's the real bottom line? Covering 95 percent of residents--and 97 percent of legal residents--through a program that will require outlays of around $1 to $1.3 trillion but should, if fully offset, not inflate the deficit by a dime.

Insofar as the new media reports make it seem like HELP came up with a magic elixir to cover everybody for far less money than most experts thought, I suppose there's a certain rough justice here. When the partial HELP estimate came out a few weeks ago, the media made the opposite mistake--and made it seem like the HELP bill showed reform to be way more expensive than it really was.

Still, neither the media--nor progressives--are doing the reform cause a favor by hyping the $600 billion figure. Right now, the committee with the jurisdicton over those other elements--Senate Finance--is busy hacking away at its program to bring the price tag in at under $1 trillion. But to do that, Finance is cutting subsidies and, most likely, coverage. The proper, honest reading of HELP's bill sets out a marker for how big a program has to be: at least $1 trillion and probably a bit more. 

Note: I'll be traveling today and blogging lightly, if at all. If you want more details on the bill as they become known, my suggestion is that you get them from somebody who understands the numbers, like him or her or her. In the meantime, for an example of somebody who got the full analysis right--and added some important detail--read Tim Foley at

--Jonathan Cohn