CBO Releases Two Analyses Related to the Affordable Care Act

Posted on
July 24, 2012

On June 28, 2012, the Supreme Court issued a decision that essentially made the expansion of the Medicaid program under the Affordable Care Act (ACA) a state option rather than what appeared to be mandatory for states that wanted to continue receiving federal matching funds for any part of their Medicaid program.

CBO and the staff of the Joint Committee on Taxation (JCT) have prepared two analyses that take into account that decision:

  • Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision.

    CBO and JCT have updated their estimates of the budgetary effects of the health insurance coverage provisions of the ACA to take into account the Supreme Court decision. This report describes those new estimates, how they were derived, and how they differ from the previous ones issued in March.

    CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of $1,168 billion over the 2012–2022 period—compared with $1,252 billion projected in March 2012 for that 11-year period—for a net reduction of $84 billion. (Those figures do not include the budgetary impact of other provisions of the ACA, which in the aggregate reduce budget deficits.)
  • Letter to the Honorable John Boehner providing an estimate for H.R. 6079, the Repeal of Obamacare Act, as passed by the House of Representatives on July 11, 2012.

    H.R. 6079 would repeal the ACA (with the exception of one subsection that has no budgetary effect). This estimate reflects the spending and revenue projections in CBO’s March 2012 baseline as adjusted to take into account the effects of the recent Supreme Court decision.

    Assuming that H.R. 6079 is enacted near the beginning of fiscal year 2013, CBO and JCT estimate that, on balance, the direct spending and revenue effects of enacting that legislation would cause a net increase in federal budget deficits of $109 billion over the 2013–2022 period. Specifically, we estimate that H.R. 6079 would reduce direct spending by $890 billion and reduce revenues by $1 trillion between 2013 and 2022, thus adding $109 billion to federal budget deficits over that period.

Neither of these reports represents a comprehensive new estimate of the budgetary effects of the ACA. The updated estimates for the coverage provisions taking into account the Supreme Court decision do not include the budgetary impact of other provisions of the ACA. And the estimated budgetary effects of enacting H.R. 6079 are close to, but not equivalent to, an estimate of the budgetary effects of the ACA with the signs reversed. As we explain in the estimate for H.R. 6079, some provisions of the ACA cannot be retroactively adjusted, and we anticipate that some of the changes induced by the ACA in how public and private health insurance and health care programs are administered would be sustained under H.R. 6079.