Widely cited CBO scores have their shortcomings - Insurance News | InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Newswires
Topics
    • Advisor News
    • Annuity Index
    • Annuity News
    • Companies
    • Earnings
    • Fiduciary
    • From the Field: Expert Insights
    • Health/Employee Benefits
    • Insurance & Financial Fraud
    • INN Magazine
    • Insiders Only
    • Life Insurance News
    • Newswires
    • Property and Casualty
    • Regulation News
    • Sponsored Articles
    • Washington Wire
    • Videos
    • ———
    • About
    • Meet our Editorial Staff
    • Advertise
    • Contact
    • Newsletters
  • Exclusives
  • NewsWires
  • Magazine
  • Newsletters
Sign in or register to be an INNsider.
  • AdvisorNews
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Exclusives
  • INN Magazine
  • Insurtech
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Video
  • Washington Wire
  • Life Insurance
  • Annuities
  • Advisor
  • Health/Benefits
  • Property & Casualty
  • Insurtech
  • About
  • Advertise
  • Contact
  • Editorial Staff

Get Social

  • Facebook
  • X
  • LinkedIn
Newswires
Newswires RSS Get our newsletter
Order Prints
July 20, 2017 Newswires
Share
Share
Post
Email

Widely cited CBO scores have their shortcomings

Indianapolis Business Journal (IN)

ECONOMIC ANALYSIS

Republicans are taking a terrible public relations beating. The public hears that the "nonpartisan Congressional Budget Office" says more than 20 million will lose health insurance under the Republican plan to repeal and replace Obamacare. Who could possibly favor such a heartless idea? The GOP plan polls a paltry 17 percent approval.

Let's look closer at what CBO "scores" actually say and don't say. CBO doesn't look beyond immediate, first-order consequences of legislation. CBO doesn't take into account how people will adjust their private arrangements in response to publicpolicy changes. CBO technicians are loath to speculate what these adjustments might be, and rightfully so: because these involve thousands or millions of future private decisions. Unintended consequences, which are inevitable in major policy changes, are, by definition, unintended, and can't be foreseen with any degree of accuracy.

Suppose Abraham Lincoln had submitted the Emancipation Proclamation to the CBO for analysis. The CBO might have reasoned: "This proclamation says slaves will henceforth not be slaves. Let's see. There are about 4 million of them. That's a good, hard number we can use. They will no longer be forced to supply plantation labor without pay. Their current jobs won't exist. While they were slaves, their owners had a big incentive to keep them fed. Ex-slaves will have no master. It's not clear how they will obtain food. That's all we know for sure."

CBO would duly write this up in acceptable bureaucratese. And the next morning's headlines would be (we're dead serious): "4 million black slaves to lose jobs." With the subhead: "Nonpartisan agency says starvation looms for thousands." No doubt there'd be a sidebar: "Anti-war senator calls Lincoln a murderer."

We know that, in the real world, this isn't at all what happened. Some ex-slaves ended up as paid laborers or sharecroppers with their old master. Some made arrangements with other employers. Some struck out on their own and moved from the South. The CBO's analysis that "4 million slaves will lose their current jobs" would be both technically correct and horribly wrong in its implications.

So it goes with health insurance. If we remove the penalty for not buying government-approved insurance, some people will not buy the insurance. But they won't be worse offnot buying a product they were forced to buy in the first place. Of course, being freed from the obligation to buy health insurance is hardly the moral equivalent of being freed from involuntary servitude, but the implications of CBO scoring are the same.?¢

If we remove the penalty for not buying governmentapproved insurance, some people will not buy the insurance.

Older

A.M. Best Affirms Credit Ratings of Lloyd’s

Newer

As GOP health care plan collapses, Daines again supports repealing Obamacare without replacement

Advisor News

  • Social Security literacy is crucial for advisors
  • The $25T market opportunity in mid-market and mass-affluent households
  • Advisors must lead the policy risk conversation
  • Gen X more anxious than baby boomers about retirement
  • Taxing trend: How the OBBBA is breaking the standard deduction reliance
More Advisor News

Annuity News

  • CT commissioner: 70% of policyholders covered in PHL liquidation plan
  • ‘I get confused:’ Regulators ponder increasing illustration complexities
  • Three ways the Corebridge/Equitable merger could shake up the annuity market
  • Corebridge, Equitable merge to create potential new annuity sales king
  • LIMRA: Final retail annuity sales total $464.1 billion in 2025
More Annuity News

Health/Employee Benefits News

  • Illinois pursues abortion coverage for people with little or no insurance
  • Navigator cuts leave Americans with less help to find Obamacare plans
  • More than 500 apartments coming to former Centene campus in University City
  • Many Virginians drop ACA coverage and more likely will, SCC hears
  • Tens of thousands of Virginians dropping Obamacare coverage
More Health/Employee Benefits News

Life Insurance News

  • INDUSTRY LEADERS, STAKEHOLDERS WELCOME NEW CHIEF ADVOCACY OFFICER
  • Stephanie Lundquist, Bryan Jordan join Securian Financial Board of Directors
  • WHAT THEY ARE SAYING: KATHLEEN COULOMBE JOINS ACU AS CHIEF ADVOCACY OFFICER
  • A-CAP Appoints Kirk Cullimore as President of Sentinel Security Life
  • Nationwide enters centennial year stronger than ever
More Life Insurance News

- Presented By -

Top Read Stories

More Top Read Stories >

NEWS INSIDE

  • Companies
  • Earnings
  • Economic News
  • INN Magazine
  • Insurtech News
  • Newswires Feed
  • Regulation News
  • Washington Wire
  • Videos

FEATURED OFFERS

Protectors Vegas Arrives Nov 9th - 11th
1,000+ attendees. 150+ speakers. Join the largest event in life & annuities this November.

An FIA Cap That Stays Locked
CapLock™ from Oceanview locks the cap at issue for 5 or 7 years. No resets. Just clarity.

Aim higher with Ascend annuities
Fixed, fixed-indexed, registered index-linked and advisory annuities to help you go above and beyond

Unlock the Future of Index-Linked Solutions
Join industry leaders shaping next-gen index strategies, distribution, and innovation.

Leveraging Underwriting Innovations
See how Pacific Life’s approach to life insurance underwriting can give you a competitive edge.

Press Releases

  • RFP #T01525
  • RFP #T01725
  • Insurate expands workers’ comp into: CA, FL, LA, NC, NJ, PA, VA
  • LifeSecure Insurance Company Announces Retirement of Brian Vestergaard, Additions to Executive Leadership
  • RFP #T02226
More Press Releases > Add Your Press Release >

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Advisor News
  • Annuity Index
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • From the Field: Expert Insights
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Magazine
  • Insiders Only
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Washington Wire
  • Videos
  • ———
  • About
  • Meet our Editorial Staff
  • Advertise
  • Contact
  • Newsletters

Top Sections

  • AdvisorNews
  • Annuity News
  • Health/Employee Benefits News
  • InsuranceNewsNet Magazine
  • Life Insurance News
  • Property and Casualty News
  • Washington Wire

Our Company

  • About
  • Advertise
  • Contact
  • Meet our Editorial Staff
  • Magazine Subscription
  • Write for INN

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2026 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • InsuranceNewsNet Magazine

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.
Insurance News | InsuranceNewsNet