It’s important to read CBO’s new analyses of the “stabilization” package JOINTLY. Reading just the official cost estimate suggests the package would increase coverage (& the deficit). Reading it with the companion letter shows the package would REDUCE coverage (& the deficit).
CBO’s cost estimate (see cbo.gov/system/files/1…) measures the package against a baseline where CSR payments are still be made. CBO does this because it’s required to, but it’s not the world we’re living in!
Fortunately, CBO has released a companion letter (see cbo.gov/system/files/1…) analyzing the effect of funding CSRs against a baseline where CSRs are NOT being paid. Together, the two analyses can be used to paint a more relevant picture.
In the companion letter, CBO finds that funding CSRs would reduce coverage by 500k-1m people by 2021. That’s because funding CSRs would effectively cut subsidies for many subsidized enrollees. That in turn would reduce the deficit by $29 billion during the budget window.
The cost estimate shows the effect of the rest of the package. CBO estimates that the rest of the package (largely the funding for reinsurance) would increase coverage by <500k in 2021, at a cost of $19 billion during the budget window.
Putting the estimates together, CBO expects the package to reduce coverage, but also reduce the deficit. That’s the same basic tradeoff that often arises: we can spend less on coverage programs if we’d like, but typically at the cost of more uninsured.
