Reg's Blog

Senior and Post-Acute Healthcare News and Topics

CBO Score on Post-Court ACA Implications Due Today

Later today, the Congressional Budget Office is set to release an updated “score” of the Affordable Care Act (PPACA) incorporating the decision of the Supreme Court.  The fundamental reason for the update is the Court’s decision to invalidate a provision within the Act that would have penalized states via reduced federal Medicaid funding should one or more opt to not participate in Medicaid expansion.  As I have written over the past week or so, this revised score from the CBO should be fascinating, especially when spun politically by both parties.

In advance of today’s release (earlier estimates had the release pegged for yesterday), Douglas Holz-Eakin and his group the American Action Forum (Holz-Eakin is a former CBO head) provided their score of the ACA and the Medicaid expansion opt-in, opt-out scenario.  Per their estimates, if six states decided to opt-out of expansion, the associated cost increase is between $72 and $80 billion between 2014 and 2021.  If all states opted out (won’t happen), the associated cost increase over the same time frame is between $562 and $627 billion.

The reason for the cost increase estimate lies on the cost difference between newly eligible participants via expansion not being cared for within the state Medicaid system and thus using federal subsidies to buy insurance through the exchanges, at commercial insurance pricing. There is a cost difference between the two with Medicaid grant funding to a state lower (even at the Act’s full funding level) than federal subsidy through the exchange.  Holz-Eakin estimates that in the six state opt-out scenario, 4.4 million individuals will not participate in Medicaid and 3.2 million (people over 100 percent of the Federal Poverty Level)  will thus purchase subsidized insurance through the Exchange.

I’ll provide additional updates once I receive and review, the revised CBO score.

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July 24, 2012 - Posted by | Uncategorized | , , , , ,

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