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Senior and Post-Acute Healthcare News and Topics

CBO Releases Updated ACA Score

Tuesday, the Congressional Budget Office released their updated score of the ACA post the Supreme Court ruling.  Substantively, the only reason or need for an update is the Court’s tweak concerning Medicaid expansion; allowing states to opt-out of expansion.  See my post from earlier this week for a bit more information on the Court’s ruling and Medicaid expansion .

To the substance of the report: The CBO’s estimate is vanilla in a world today that is full of different flavors.  In short, the report takes a middle-of-the-road approach in estimating the ramifications of state decisions to opt-in or out of Medicaid expansion. One could literally read this conclusion weeks ago as the charge of the CBO is tight and constrained to interpreting only what is “known” at the time of their work/estimating.  As the Court’s decision creates an uncertain policy framework where certainty can only occur over time and is in the hands of state governments, the CBO can’t know enough point-in-time to craft a fully formed estimate.  The estimate thus concludes with virtual “minimal impact” compared to previous estimates.

  • The revised 11 year projection (2012 to 2022) is for a total insurance coverage outlay of  $1.168 billion compared to the March estimate of $1.252 billion; a net savings of $84 billion.  This element is separate from all other ACA costs/outlays.
  • The change in outlays is attributable to a shift in the assumption of insured private enrollees (exchange participants) versus those covered by Medicaid, tallied against those forecasted as uninsured (a three million forecasted increase over previous estimates).  The breakdown assumes some states, though unknown how many, will not participate in expansion and thus, a segment of the the population eligible for private subsidized insurance plans through an exchange will purchase coverage therein, others will opt for uninsured or fall in the gap between Medicaid coverage qualified (expanded federal poverty limit) under ACA provisions but reside in a state where expansion hasn’t occurred.  The CBO assumes this total be 6 million; 3 million go a private route and 3 million end-up uninsured.
  • The projected decrease in federal spending for individuals that do not enroll and thus become uninsured is $6,000.
  • The net difference between a person participating in Medicaid versus accessing coverage through an exchange is projected at $3,000 higher – Federal subsidy for private insurance at $9.000 versus a Medicaid cost of $6,000.

Today, little political fodder is available for either party as a result of this latest estimate.  The President and Democrats can’t claim too much victory here as any slight upward deviation in the number of state opting out of expansion and more important, certain states with disproportionately higher levels of current uinsureds and potential Medicaid eligibles shifts the numbers dramatically and negatively.  Additionally, on the heels of the Volcker report, Medicaid is a known travesty for states and touting expansion based on the CBO report as a “good thing” fiscally doesn’t quite ring true in the big picture.

Republicans are likewise stuck on this issue as it doesn’t refute any prior estimates or add any new substantive economic data to the debate.  Republicans will continue to push for repeal via November elections; the only remaining feasible option on their end for altering the trajectory of the ACA.  Taking on the CBO projections is not a political win for either party and Republicans know this; especially in an election year.  Besides, the economics are too complex for most voters, leaving the sole play an emotional and ideological issue/debate.


July 26, 2012 - Posted by | Policy and Politics - Federal | , , , , , ,

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