July 25, 2012

Blahous: Latest Score of the ACA Shows Worsened Finances

Charles Blahous

J. Fish and Lillian F. Smith Chair
Summary

From almost any vantage point, the updated CBO score is more bad news concerning the 2010 health care law’s fiscal impact.

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From almost any vantage point, the updated CBO score is more bad news concerning the 2010 health care law’s fiscal impact.

Using the highly favorable scoring convention that originally gave this law a positive score, the law looks less favorable now that the Supreme Court's Medicaid ruling is taken into account.

Comparing the health care law instead to actual prior law—as I did in my recent study— is necessary to fully understand its damaging fiscal effects. This shows that the law will add hundreds of billions to federal deficits over the next ten years, and far more beyond.

The budget score is now also accompanied by greater uncertainty and downside risk. Much depends on the decisions that individual states make about how much to expand Medicaid. CBO has done its best to project this, but calls attention to the uncertainty of the projections.

And even though the finances of the law are now estimated as being worse, CBO expects it to cover fewer people than it did last year. In other words, the per-person cost of this law has just risen further.

All in all, yet another sobering report.