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1 CBO's Record of Projecting Subsidies for Health Insurance under the Affordable Care Act: 2014 to 2016 1 (2017)

handle is hein.congrec/rjsuaca3893 and id is 1 raw text is: DECEMBER 2017 CBO's Record of Projecting Subsidies for Health Insurance Under the Affordable Care Act: 2014 to 2016 When it was enacted in March 2010, the Affordable Care Act (ACA) made major changes to the U.S. health care and health insurance systems. At that time, the Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) estimated the budgetary effects of the legislation to provide that information to the Congress and to update overall projections of the budget. CBO and JCT originally estimated that the gross costs of the ACA would be more than offset by reductions in Medicare spending, increases in revenues, and other changes-such that enacting the legislation would reduce the federal budget deficit over the 2010-2019 period. This document compares projections and subsequent outcomes for health care subsidies that account for the majority of such costs and concludes the following: 0 The agencies' estimates of those subsidies proved to be close to actual amounts for 2014 and 2015 but were much too high for 2016, and 0 In general, other organizations' estimates of health care subsidies produced around the time of the ACA's enactment were much too high for all three years. The report does not examine the effects of other provi- sions of the ACA; for many of them, the actual outcomes cannot be separately identified in administrative or sur- vey data, nor can the law's overall effects on the deficit. What Aspects of Their Estimates Did CB0 andJCT Analyze for This Report? The ACA significantly expanded eligibility for Medicaid; created health insurance marketplaces through which certain individuals and families receive federal subsidies; established a mandate for most legal residents of the United States to obtain health insurance or pay a penalty if they are not exempt; reduced the growth of Medicare's payment rates for most services; imposed an excise tax on insurance plans with relatively high premiums; made changes to the federal tax code-including an increase in the Hospital Insurance payroll tax rate for high-income taxpayers, a surtax on those taxpayers net investment income, and annual fees imposed on health insurers; and made various other changes to Medicare, Medicaid, and other programs. Isolating the budgetary effects of the ACA (or of any complex legislation) is difficult because they are often embedded in the spending for existing programs-Medicare, for example-and in broad cate- gories of federal tax revenues. This report focuses mainly on CBO and JCT's estimates of subsidies for which total amounts can be separately identified in administrative or survey data-specifically, federal spending for people made newly eligible for Medicaid by the ACA and subsidies for health insurance received through the marketplaces and the Basic Health Program. (The Basic Health Program allows states to offer subsidies to certain low-income people that are based on the subsidies available through the market- places.) To examine the factors that caused CBO and JCT's esti- mates of those identifiable subsidies to differ from actual amounts during the 2014-2016 period, this document compares projections and subsequent outcomes for the following groups of people: * Those made newly eligible for Medicaid under the ACA,

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