New CBO Analysis Hikes Projected Affordable Health Care Act Cost by $115 Billion

New analysis  released Tuesday, May 11 by the non-partisan Congressional Budget Office (CBO) shows H.R. 3590, the Patient Protection and Affordable Care Act, Public Law 111-148 (Health Care Reform Law) passed in March will cost $115 Billion more than originally estimated in the CBO’s March 15, 2010 discretionary spending analysis.

According to CBO, additional information about the potential effects of the Health Care Reform Law on spending funded through the annual appropriation process (discretionary spending). By their nature all such potential effects on discretionary spending are subject to future appropriation actions, which could result in greater or smaller costs than the sums authorized by the legislation. While still limited in certain respects, the updated CBO analysis provides information on the major components of such costs in three general categories:

  • The costs that will be incurred by federal agencies to implement the new policies established by the Health Care Reform Law, such as administrative expenses for the Department of Health and Human Services and the Internal Revenue Service for carrying out key requirements of the legislation.
  • Explicit authorizations for future appropriations for a variety of grant and other program spending for which the act identifies the specific funding levels it envisions for one or more years. (Such cases include provisions where a specified funding level is authorized for an initial year along with the authorization of such sums as may be necessary for continued funding in subsequent years.)
  • Explicit authorizations for future appropriations for a variety of grant and other program spending for which no specific funding levels are identified in the legislation. That type of provision generally includes legislative language that authorizes the appropriation of “such sums as may be necessary,” often for a particular period of time.

According to the updated analysis, CBO estimates that total authorized costs in the first two categories probably exceed $115 billion over the 2010-2019 period. CBO still does not have an estimate of the potential costs of authorizations in the third category. 

CBO previously issued an estimate of the Health Care Reform Law’s direct spending and revenue effects  in combination with the Reconciliation Act of 2010 (Public Law 111-152), which amended it.  (Direct spending effects are those that do not require subsequent appropriation action.)  CBO estimated that those two laws, in combination, would produce a net reduction in federal deficits of $143 billion over the 2010-2019 period as a result of changes in direct spending and revenues.

Ultimately, the cost and other implications of the Health Care Reform Law will depend largely upon how its provisions are construed and implemented by federal and state regulators, along with any subsequent adjustments, if any that Congress may elect to enact.  With federal officials hard at work preparing implementing regulations and other guidance and procedures, health industry leaders and other concerned Americans should stay informed and continue to share their input on these critical issues as these decisions are shaped.  Join the discussion by participating in the Coalition For Responsible Health Care Policy linked in group and/or its subgroup,  Project COPE: Coalition for Patient Empowerment .

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Other Recent Developments

If you found this information of interest, you also may be interested in information about upcoming programs to be presented by Ms. Stamer, acquiring a copy of a recording or materials from previous programs she has presented, or arranging training for your organization.  For more information about these opportunities, contact Ms. Stamer directly.

If you found this information of interest, you also may be interested in reviewing some of the following recent Updates available online by clicking on the article title:

For More Information

We hope that this information is useful to you.  If you need assistance evaluating or responding to the Health Care Reform Law or health care compliance, risk management, transactional, operational, reimbursement, or public policy concerns, please contact the author of this update, Cynthia Marcotte Stamer, at (469) 767-8872, cstamer@Solutionslawyer.net.

Vice President of the North Texas Health Care Compliance Professionals Association, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and the former Board Compliance Chair of the National Kidney Foundation of North Texas, Ms. Stamer has more than 22 years experience advising health industry clients about these and other matters.  A popular lecturer and widely published author on health industry and human resources matters, Ms. Stamer continuously advises health industry clients about these and other related concerns.  Ms. Stamer also publishes and speaks extensively on health and managed care industry regulatory, staffing and human resources, compensation and benefits, and other operations and risk management concerns.  Her insights on these and other related matters appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.  For additional information about Ms. Stamer, her experience, involvements, programs or publications, see here.  

You can review other recent health care and internal controls resources and additional information about the health industry and other experience of Ms. Stamer here.  If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile at here or e-mailing this information here. To unsubscribe, e-mail here.

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