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Patient Protection and Affordable Care Act [i] (December 20, 2009)

handle is hein.congrec/cbo1084 and id is 1 raw text is: O CONGRESSIONAL BUDGET OFFICE Douglas W. Elmendorf, Director U.S. Congress Washington, DC 20515 December 20, 2009 Honorable Harry Reid Majority Leader United States Senate Washington, DC 20510 Dear Mr. Leader: The Congressional Budget Office (CBO) has discovered an error in the cost estimatc released On Dcccmbr 19. 2009. related to the longer-term effects on direct spending of the manager's amendment to the Patient Protection and Affordable Care Act (PPACA), Senate Amendment 2786 in the nature of a substitute to H.R. 3590 (as printed in the Congressional Record on November 19, 2009). Correcting that error has no impact on the estimated effects of the legislation during the 2010-2019 period. However, the correction reduces the degree to which the legislation would lower federal deficits in the decade after 2019. The legislation would establish an Independent Payment Advisory Board, which would be required, under certain circumstances, to recommend changes to the Medicare program to limit the rate of growth in that program's spending. Those recommendations would go into effect automatically unless blocked by subsequent legislative action. In its original estimate, CBO wrote that: Such recommendations would be required if the Chief Actuary for the Medicare program projected that the program's spending per beneficiary would grow more rapidly than a measure of inflation (the average of the growth rates of the consumer price index for medical services and the overall index for all urban consumers). That statement is correct for fiscal years 2015 through 2019. After 2019, however, the threshold for Medicare spending growth that would trigger recommendations for spending reductions would be higher-specifically, the rate of increase in gross domestic product (GDP) per capita plus 1 percentage point. With this corrected reading, savings from changes to the Medicare program (along with other changes to direct spending that are not associated directly with expanded insurance coverage) would increase at a rate that is between 10 percent and 15 percent per year during the 2020-2029 period, compared with a growth rate of nearly 15 percent reported in the initial estimate. The long-run budgetary effects of the other broad categories of the legislation are unchanged from the initial estimate. All told, CBO expects that the legislation, if enacted, would reduce federal budget deficits over the decade after 2019 www.cbo.gov

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