CONGRESSIONAL BUDGET OFFICE Douglas W. Elmendorf, Director
U.S. Congress
Washington, DC 20515
July 26, 2009
Honorable Dave Camp
Ranking Member
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515
Dear Congressman:
The Congressional Budget Office (CBO) and the staff of the Joint Committee on
Taxation (JCT) recently completed a preliminary analysis of the specifications
related to health insurance coverage that are reflected in the America’s Affordable
Health Choices Act, which was released by the House Committee on Ways and
Means on July 14, 2009.
Among other things, those specifications would establish a mandate for most legal
residents to obtain health insurance, significantly expand eligibility for Medicaid,
regulate the pricing and terms of private health insurance policies, set up
insurance “exchanges” through which certain individuals and families could
receive federal subsidies to reduce the cost of purchasing insurance, and offer a
“public plan” option similar to Medicare through those exchanges. For reasons
outlined in CBO’s July 14 letter summarizing that analysis—and in our letter of
July 17, which took into account the other parts of the legislation that would raise
taxes or reduce other spending—our analysis to date does not represent a formal
or complete cost estimate for the draft legislation.
The attached analysis responds to your request for additional information about
the effects of the specifications regarding health insurance coverage. In particular,
you asked about the effects on enrollment in private coverage, in the new public
plan, and in Medicaid; the effects on private-sector insurance premiums and the
labor market; the longer-term cost of the plan; and the allocation of its net budget
impact between outlays and revenues. Because of the complexity of the changes
that have been proposed and their potential effects, we are unable to address all
aspects of every question that you raised.
www.cbo.gov
CONGRESSIONAL BUDGET OFFICE Douglas W. Elmendorf, Director
U.S. Congress
Washington, DC 20515
July 26, 2009
Honorable Dave Camp
Ranking Member
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515
Dear Congressman:
The Congressional Budget Office (CBO) and the staff of the Joint Committee on
Taxation (JCT) recently completed a preliminary analysis of the specifications
related to health insurance coverage that are reflected in the America’s Affordable
Health Choices Act, which was released by the House Committee on Ways and
Means on July 14, 2009.
Among other things, those specifications would establish a mandate for most legal
residents to obtain health insurance, significantly expand eligibility for Medicaid,
regulate the pricing and terms of private health insurance policies, set up
insurance “exchanges” through which certain individuals and families could
receive federal subsidies to reduce the cost of purchasing insurance, and offer a
“public plan” option similar to Medicare through those exchanges. For reasons
outlined in CBO’s July 14 letter summarizing that analysis—and in our letter of
July 17, which took into account the other parts of the legislation that would raise
taxes or reduce other spending—our analysis to date does not represent a formal
or complete cost estimate for the draft legislation.
The attached analysis responds to your request for additional information about
the effects of the specifications regarding health insurance coverage. In particular,
you asked about the effects on enrollment in private coverage, in the new public
plan, and in Medicaid; the effects on private-sector insurance premiums and the
labor market; the longer-term cost of the plan; and the allocation of its net budget
impact between outlays and revenues. Because of the complexity of the changes
that have been proposed and their potential effects, we are unable to address all
aspects of every question that you raised.
www.cbo.gov
