Washington Update

Congressional Budget Office: Measuring ACA’s Fiscal Impact No Longer Possible

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The Congressional Budget Office (CBO) and Congress’s Joint Committee on Taxation have asserted they can no longer measure the full fiscal effects of the Affordable Care Act (ACA), an announcement that has provoked widespread anger and disbelief on Capitol Hill, especially among opponents of the law. 

CBO’s conclusion was contained in a footnote to a reportUpdated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act—that the office released on April 14, but this particular detail was not brought to widespread light until recently.

In turn, Sen. Ron Johnson (R-WI) introduced the “Truth in Obamacare Reporting Act,” a bill that would force the CBO to score the net impact of the law on the federal deficit. “CBO undoubtedly faces considerable challenges in separating the impact of the law from some of the other programs that interact with it, but it can and should be able to estimate those costs and impacts so that Congress and the American people understand the true scope of financial harm that Obamacare is causing,” said Johnson.

When the ACA was enacted in 2010, the CBO’s initial determination of the ACA’s budgetary impact estimated a reduction in the deficit of more than $120 billion over a decade. The CBO last commented on the fiscal impact of the ACA two years ago, when it noted that if the law were repealed, it would increase the deficit by $109 billion over a 10-year period. 

Now, however, the April footnote indicates that the CBO “can no longer determine exactly how the provisions of the ACA that are not related to the expansion of health insurance coverage have affected their projections of direct spending and revenues.” The same footnote also stated that "[i]solating the incremental effects of those provisions on previously existing programs and revenues four years after enactment of the Affordable Care Act is not possible." The CBO attributed these difficulties to delays implementing several of the law’s provisions and adjustments to other provisions of the law.

Some budget analysts have stressed that the CBO’s footnote was not unusual and that after several years it is often difficult, if not impossible, to determine the precise budgetary impact of any bill because other factors are constantly shifting. 

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