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Health Care

The Congress has recently approved major health care legislation in the form of two pieces of legislation: the Patient Protection and Affordable Care Act (PPACA, Public Law 111-148); and, following that, the Health Care and Education Reconciliation Act of 2010 (H.R. 4872), which made a number of changes to provisions of PPACA along with significant changes to the federal postsecondary education programs.

On March 20, 2010, CBO released its final cost estimate for the reconciliation act, which encompassed the effects of both pieces of legislation. Table 1 (on page 5) provides a broad summary and Table 2 offers a detailed breakdown of the budgetary effects of the two pieces of legislation. CBO and the staff of the Joint Committee on Taxation (JCT) estimate that enacting both pieces of legislation will produce a net reduction in federal deficits of $143 billion over the 2010-2019 period. About $124 billion of that savings stems from provisions dealing with health care and federal revenues; the other $19 billion results from the education provisions. Those figures do not include potential costs that would be funded through future appropriations (those are discussed on pages 10-11 of the cost estimate).

CBO and JCT estimate that by 2019, the two pieces of legislation combined will reduce the number of nonelderly people who are uninsured by about 32 million, leaving about 23 million nonelderly residents uninsured. Those findings are presented in Table 4, along with the budgetary effects of the various provisions related to health insurance coverage. Table 5 shows the budgetary impact of the health care provisions that are not related to health insurance coverage (primarily involving the Medicare program). The impact of revenue provisions is reported separately by JCT.

CBO also analyzed the effects on health insurance premiums of an earlier version of the legislation. A November analysis examines the expected impact on average premiums for health insurance in different markets. Although CBO and JCT have not updated those estimates, the effects of the enacted legislation are expected to be quite similar.

Panel of Health Advisers

Consisting of acknowledged experts in health care, CBO's panel of health advisers meets periodically to examine research in health policy and to advise the agency on its analyses of health care issues. The panel thus helps to further the reliability, professional quality, and transparency of the agency's work.
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Inside CBO

Experts from across the agency come together to analyze health care: estimating the budgetary impacts of federal health care programs, preparing studies of health policy issues, and estimating the budgetary and other effects of proposals to alter the health care system. Two units in the Budget Analysis Division focus particularly on estimating the cost of proposed health care legislation and projecting spending for federal health care programs. The Health and Human Resources Division conducts studies of health issues, including Medicare, Medicaid, pharmaceuticals, public health, and private health markets; it also develops models that underlie cost estimates. The National Security Division conducts studies of the health care provided by the Departments of Defense and Veterans Affairs. The Microeconomic Studies Division also analyzes health issues, especially those related to competition or market structure, including most recently prescription drug pricing and research and development in the pharmaceutical industry.

CBO continually seeks health economists, analysts, and research assistants for health-related programs. The agency has also devoted an internship to health policy, which is for graduate students. It may be available on a summer, semester, or year-long basis depending on work needs and students' availability.
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Supplemental Info

Changes in Payments to Physicians

Children's Health Insurance Program Baseline

Medicaid Baseline

Options for Physician Payments Under Medicare

Estimates for March 2010 Health Care Legislation

Background Reading

Publications

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Cost Estimates for Previous Versions

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