Additional Information Regarding the Effects of Health Insurance Coverage Specifications Reflected in the America

July 26, 2009

Today CBO released a letter responding to a request from the Ranking Members of four House committees for additional information about the effects of health insurance coverage specifications reflected in the Americas Affordable Health Choices Act, which was released by the House Committee on Ways and Means on July 14, 2009. (For regular readers of our analysis, it's been a busy weekend.)

CBO and the staff of the Joint Committee on Taxation (JCT) released a preliminary analysis of the provisions of this legislation related to health insurance coverage on July 14 and then released a further analysis that took into account the other parts of the legislation on July 17. Among other things, the coverage specifications would establish a mandate for most legal residents to obtain health insurance, significantly expand eligibility for Medicaid, regulate the pricing and terms of private health insurance policies, set up insurance exchanges through which certain individuals and families could receive federal subsidies to reduce the cost of purchasing insurance, and offer a public plan option similar to Medicare through those exchanges. For reasons outlined in those earlier letters, our analysis to date does not represent a formal or complete cost estimate for the draft legislation.

Congressmen Camp, Barton, Kline, and Ryan asked a number of questions regarding the proposal. In response, todays letter discusses: the effects of the proposal on enrollment in private coverage, in the new public plan, and in Medicaid; the effects of the proposal on private-sector insurance premiums and the labor market; the longer-term cost of the proposal; and the allocation of the proposals net budget impact between outlays and revenues. I wont try to summarize the discussion here because the issues are complex and not conducive to a brief blog. The letter is, like all of our products, available on CBOs web site.