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Answers to Questions for the Record following a Hearing on CBO's Appropriation Request for Fiscal Year 2018 Conducted by the Subcommittee on the Legislative Branch, Senate Committee on Appropriations 1 (August 3, 2017)

handle is hein.congrec/cbo3665 and id is 1 raw text is: n, . AUGUST 3, 2017 Answers to Questions for the Record Following a Hearing on CBO's Appropriation Request for Fiscal Year 2018 Conducted by the Subcommittee on the Legislative Branch, Senate Committee on Appropriations On June 21, 2017, the Subcommittee on the Legislative Branch of the Senate Committee on Appropriations convened a hearing at which Keith Hall, Director of the Congressional Budget Office, testified about CBO's appropriation request forfiscal year 2018 (www. cbo.gov/ publication/52785). After the hearing, two Senators submitted questions for the record. This document provides CBO's answers. Senator Kennedy Question. How do the original CBO cost estimates compare with the actual budgetary effects of the Medicaid expansion under the Affordable Care Act (ACA) and of the ACA in general? Answer. In CBO's original cost estimate, which was released in March 2010, the agency projected that spending in 2016 on people made eligible for Medicaid because of the ACA would equal $68 billion. The amount that was actually spent, CBO now estimates, was $65 billion. However, in the March 2010 projection, CBO had anticipated that all states would adopt the ACA's expansion of eligibility for Medicaid. In June 2012, the Supreme Court ruled that that expansion was optional for states. CBO's projection in July 2012, which incorporated that ruling, was $38 billion for 2016-about 60 percent of the currently estimated amount of $65 billion. It is difficult to identify the budgetary effects of the ACA in general, because the budget- ary effects of many provisions are embedded in the spending for preexisting programs- Medicare, for example-and in broad categories of federal tax revenues. But the effects of health insurance subsidies can be more readily identified. In March 2010, CBO and the staff of the Joint Committee on Taxation projected the cost to the federal government of premium tax credits and cost-sharing subsidies for health insurance purchased through the health insurance marketplaces established under the ACA. The projected cost was $77 billion for fiscal year 2016. That projection proved roughly twice as large as the estimated actual amount, about $36 billion, primarily because the agencies overestimated the number of people who would enroll in the marketplaces. Question. How does the original CBO cost estimate compare with the actual budgetary effect of Medicare's prescription drug insurance program? 1. For discussion of the reasons for changes in those estimates since the enactment of the ACA, see Congressional Budget Office, Federal Subsidiesfor Health Insurance Coverage for People Under Age 65:2016to 2026(March 2016), p. 23, www.cbo.gov/publication/51385.

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