CBO Says Obamacare Exchanges Not In a Death Spiral

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Over at Vox, health care superguru Sarah Kliff writes about a new CBO report that projects no imminent “death spiral” for Obamacare. CBO reckons that 10 million people will buy insurance from the Obamacare exchanges this year, rising to 13 million by 2027. That’s definitely not a collapse, no matter how often Mitch McConnell and Paul Ryan say so. But Kliff adds this:

To be clear: The insurance marketplaces are way smaller than CBO had initially expected. Back when the law passed, the agency estimated that there would be 26 million people in the marketplace in 2017. We’re on pace to have a market less than half that size. A market with more people would likely have lower premiums, as it would mean more healthy people had decided to join.

This is true, but it’s important to understand why it’s true. CBO originally projected that Obamacare would lead to a big drop in the number of people on private health plans, who would then buy insurance on the exchanges. That didn’t happen. Instead, the number of people on private plans stayed nearly stable. Here’s how things turned out:

  • 2013 projection for 2016: +22 million on exchanges, -10 million in private coverage, +12 million in Medicaid = net +24 million (Table 1)
  • 2016 projection for 2016: +12 million on exchanges, -4 million in private coverage, +13 million in Medicaid = net +21 million (Table 4)

So the difference between the original projection and the actual numbers for 2016 is about 3 million. That’s a fairly small difference, and it’s basically good news: we’d rather have people on employer health plans than Obamacare. The coverage is generally better and it costs taxpayers less. The downside is that the low Obamacare numbers make the exchanges a bit less stable, but they aren’t showing any signs of collapse, and it’s a worthwhile price to pay anyway.

But really, you don’t even need to go through this exercise. The easiest way to see how Obamacare is doing is to look at the number of uninsured. Here are the projections:

There are 4 million fewer uninsured than CBO originally projected, and it’s cost the taxpayers less than CBO originally thought. In other words, Obamacare has performed better than projected and cost less than projected. That’s a big win.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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