Budget Referees Make It Harder To Evaluate Obamacare Costs

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The Congressional Budget Office will no longer evaluate the fiscal implications of some parts of the Affordable Care Act, partly because of all the changes made during implementation. KHN’s Mary Agnes Carey and The Fiscal Times’ Eric Pianin discuss.

MARY AGNES CAREY:  Welcome to Health on the Hill, I’m Mary Agnes Cary. One of the Obama administration’s major selling points of the sweeping 2010 health care law was a Congressional Budget Office (CBO) analysis that the measure would expand coverage for millions of people, while reducing the federal deficit over the next decade. But recently the CBO said it could no longer evaluate the fiscal implications of all of the law’s provisions, in part because the administration has made so many changes during implementation. Eric Pianin of The Fiscal Times is with us now to discuss this development. Thanks so much for being here, Eric.

ERIC PIANIN:  It’s my pleasure.

MARY AGNES CAREY:  As you and I both know from covering the health care law together, the CBO had made this estimate that the law would save something around $120 billion over the next decade. But given this recent announcement what does this mean for the CBO’s ability to analyze these provisions on how much money they’ll save.

ERIC PIANIN:  I think you’re right, I think the CBO consistently in recent years has projected that overall it would have a positive impact on the deficit, maybe bring it down by $120 billion over ten years or so. And when Republicans made a big push to try to repeal Obamacare, the CBO warned that it could add $210 billion to the deficit, so that was the flip side. But very interestingly in April, very quietly in a footnote to a very complicated report, the CBO signaled for the first time that while it could point to areas or programs in the Affordable Care Act that would bring down the deficit long term they couldn’t make a blanket assertion that the law taken together with all of its component parts would have that impact. They backed away. In a sense, they backed down, from that earlier projection.

MARY AGNES CAREY:  Eric, there are some parts of the law the CBO can track and others that they can’t. Can you explain?

ERIC PIANIN:  Well, I think that’s right. In terms of the insurance coverage and subsidy program to help poor people obtain insurance, the CBO can track that and has pretty good handle on its long-term budgetary impact. For other programs, like for the example, the employer mandate and a series of other policy initiatives, and segments of the program that have been temporarily put on hold or delayed, it’s much harder for them to track that.

MARY AGNES CAREY:  You’ve been a budget reporter for a long time. Have you ever seen the CBO do this before? Come out and basically say, we just can’t score some elements.

ERIC PIANIN:  I can’t recall anything quite like this. And I am kind of surprised by the way they did it, so quietly, in terms of a footnote. It wasn’t like, a little announcement or a separate box in one of their complicated reports — say, “Oh, by the way, we can’t do this anymore.” It was something that they — in a sense, slipped in — my guess feeling that experts who are following this issue very closely, they would immediately pick up on it.

But for the rest of us who don’t follow it in an incremental stage, it was kind of a surprise.

MARY AGNES CAREY:  You mentioned politics a minute ago. What are the political ramifications of this?

ERIC PIANIN:  I think from the Republican standpoint, this is just one more example of [bait and switch], in which the administration promised one thing and is delivering something else.

This isn’t the administration’s estimates. This is the independent Congressional Budget Office doing this, so I guess if [the White House Office of Management and Budget] made a pronouncement like that, it would be even more controversial. But I sense that this will be just like one more argument by the Republicans that this is a terribly flawed program that needs to be changed or done away with, according to some.

MARY AGNES CAREY:  Do you think it will be an issue in the midterms or the presidential [campaign], or that it wouldn’t get that kind of legs?

ERIC PIANIN:  It’s not clear. I think that maybe in some races and some venues it might be brought up as another example. And I don’t think we’ve heard the last of it. I’m sure members of Congress are bombarding Doug Elmendorf, the head of the CBO, with letters demanding explanations. My guess is we’re going to be hearing more about this at least on the Hill or in a budget context.

It’s something I’m sure the administration is worried about, because it was a great arguing point for the Affordable Care Act. Maybe this program wasn’t working. Maybe we had a terrible rollout, but in the end, ten years from now, this is going to be a good thing for the budget.

MARY AGNES CAREY:  Thanks so much, Eric Pianin of The Fiscal Times.

ERIC PIANIN: My pleasure.