CBO to Stop Measuring PPACA Budgetary Impact: 5 Things to Know

In a footnote that flew under the radar until recently, the Congressional Budget Office stated in an April report that it's no longer possible to assess the economic impact of certain provisions of the Patient Protection and Affordable Care Act.

Here are five things to know about the CBO's decision.

money1. The Congressional Budget Office included the footnote in a report issued in April updating its estimates concerning the effects of the insurance coverage provisions of the PPCA. On the second page of the report, the footnote says the CBO and Joint Committee on Taxation can no longer determine how the provisions of the law not related to health insurance coverage expansion affect direct spending and revenues.

The footnote states:  "The provisions that expand insurance coverage established entirely new programs or components of programs that can be isolated and reassessed. In contrast, other provisions of the [PPACA] significantly modified existing federal programs and made changes to the Internal Revenue Code. Isolating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the [PPACA] is not possible."

2. Although the report and its findings received media attention in April, the footnote was not reported on until this past Wednesday, when Roll Call ran a story about it.  

3. The CBO's last comprehensive assessment of the law suggested the PPACA would lead to savings for the U.S. The CBO released its last assessment taking all provisions of the PPACA into consideration in July 2012. That report estimated the direct spending and revenue effects of H.R. 6079, titled the "Repeal of Obamacare Act," passed by the House in July 2012. The report estimated the legislation, if enacted near the start of fiscal year 2013, would have increased federal budget deficit by $109 billion from 2013 to 2022 by repealing the PPACA, implying that having the law in effect would lead to savings.     

4. The CBO's decision to stop assessing the budgetary impact of all of the law's components will make it unclear whether the PPACA is actually reducing the federal deficit, in addition to shrinking the uninsured population. Charles Blahous, a senior research fellow at the George Mason University Mercatus Center, told Roll Call that because there will be no more updates on the effectiveness of the PPACA's financing provisions, they could be pushed back continually without the budgetary fallout becoming apparent.

The CBO's previous estimates assumed the law would be enacted as written; however, delays and adjustments to various provisions, such as the employer mandate, expected to bring in tax revenue create uncertainty about whether the law's expected savings are actually coming to fruition, according to Roll Call.

5. However, others have pointed out how difficult it is to attract the budgetary effects of legislation. Dan Mendelson, CEO of healthcare consulting firm Avalere Health, told Roll Call it can be hard to isolate the fiscal effects of a law over time, given how many other things change over the years. Mr. Mendelson also said assessing the economic impact of a law becomes irrelevant eventually, as it becomes part of the baseline of expenditures as part of current law.

More Articles on the Congressional Budget Office:
CBO Lowers Estimate of Uninsured Who Will Pay PPACA Penalty: 5 Things to Know  
CBO Lowers Projected Cost of PPACA Insurance Benefits
5 Key CBO Healthcare Spending and Policy Projections 

 

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