The Numbers Game

Sorting out conflicting reports on the cost of House’s health care bill

After House Democrats unveiled their proposal for health care reform Tuesday, media outlets attached a variety of cost estimates to the plan. The New York Times and The Wall Street Journal ran with a preliminary analysis from the Congressional Budget Office that put the price at $1.04 trillion over 10 years. The Washington Post, citing “Democratic aides,” pegged the cost at $1.2 trillion; toward the bottom of its story, the Post reported the lower CBO figure, but also noted that “CBO Director Douglas Elmendorf cautioned in a blog posting that the agency will not have a final cost estimate until it receives more information.” The Associated Press, meanwhile, citing “a House Democratic aide” who “spoke on condition of anonymity,” put the cost at $1.5 trillion. In a subsequent story, the AP repeated the $1.5 trillion figure, without attribution and again without mentioning the CBO estimate.

So what explains the discrepancy? In opting to use the CBO estimate, the Times and Journal were choosing the default option for media outlets covering the cost of proposed legislation. The Post went a different route, but spelled out for readers why it did so, at least in its original story. That leaves the AP, which found itself facing some criticism after publishing its initial reports. In response to inquiries about how the AP settled on its figure for the bill’s cost, spokesman Paul Colford sent this reply to CJR and other publications:

The Congressional Budget Office score of $1.04 trillion that the Democrats cite is the figure for the new health insurance “exchange.”

However, that is a net figure, including about $237 billion in revenue raised from employer and individual mandates — fees paid by those who don’t provide or purchase care. Therefore, if you look at costs, the score on that is about $1.27 trillion.

There is also a separate piece of the bill covering Medicare. It includes about $350 billion in new spending (the biggest single piece is for the so-called “doc fix,” which involves the payment rate to doctors under Medicare).

There’s some merit to this reply—while media outlets customarily use CBO’s bottom-line figures, those numbers are actually estimates of a bill’s effect on the deficit, not its total “cost”—and it was interesting to see that AP had a basis for its number that extended beyond the word of an anonymous aide. Still, add up $1.27 trillion and $350 billion and you actually get to more than $1.6 billion, a figure that didn’t appear in any of the AP’s reporting. Also, it seemed cumbersome to only make this explanation available upon request. Couldn’t it have been included in at least the Web version of the story, I asked Colford?

In response, he sent along a story that had just gone out over the AP wire, headlined “A breakdown of the cost of the House health bill.” Apparently written in response to earlier complaints—a Democratic talking point is included in an unusual note at the conclusion—the story repeats the $1.5 trillion cost in its lede, then goes on to list “total projected outlays” at $1.65 trillion and “total offsets and revenue-raisers” at $1.3 trillion, with sources cited for each of the components. It’s good to see the detail here, but it’s still not clear why the AP is sticking with the $1.5 trillion figure—the rest of the story supports either a gross figure of $1.65 trillion or a net of $1.3 trillion. (An e-mail seeking further explanation was sent to Colford after business hours Thursday. At the time of this posting, the AP had not provided a response; we will update if one arrives. Update, 11:53 a.m.: Colford says that the “$1.5 trillion figure comes from our reporters being conservative and careful, rounding broadly.”)

It’s possible that the AP’s explanation will ultimately make sense, but the fact that it took multiple inquiries to get to this point is not a good thing. Media outlets in general should be more comprehensive in their reporting of the fiscal impact of government programs, and more transparent in explaining the choices they make. That means acknowledging that these figures, whatever their provenance, have uncertainty built in. Had the AP done that from the start, it could have saved itself a lot of trouble.

There’s another lesson here, too, which is that the use of decimal notation in all the stories obscures the enormous gap between the different figures. The difference between the AP’s figure and the CBO estimate used by the Times and the Journal might not seem thatbig. But it amounts to nearly 59 percent of the entire federal economic stimulus package (though, admittedly, over a longer time horizon). That’s a staggering sum of money, but one that might be glossed over by many readers because of the way it’s rendered on the page (or the screen).

How to get around this? It’s a challenge, and there’s no simple rule—in this case, a “here’s how much this will cost each taxpayer” box wouldn’t have been very illuminating. But unpacking these numbers, and bringing them down to human scale, is the best way to ensure that they’re understood.

Update 2, 7/22/09: Roll Call has weighed in with its own take on the subject, and pegs the bill’s gross cost at “more than $1.6 trillion.”

Not enough numbers for you? You can read Elmendorf’s blog post on the subject, or the full CBO report, here.

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Greg Marx is an associate editor at CJR. Follow him on Twitter @gregamarx.