In response to the request for an estimate of the net impact on the deficit of the ACA, the followin

July 2014 (11) June 2014 (10) May 2014 (5) April 2014 (10) March 2014 (11) February 2014 (20) January 2014 (5) December 2013 (16) November 2013 (11) October 2013 (8) September 2013 (21) August 2013 (2) July 2013 (5)
Following a recent hearing, we were asked by a Member of Congress to provide an updated estimate of the budgetary effects of the Affordable Care Act. Here is our answer (provided as part of a set of answers to questions for the record ): In March 2010, just before the Affordable Care Act (ACA) was enacted, CBO and the staff of the Joint Committee on Taxation (JCT) estimated that changes in direct spending and revenues under the legislation would reduce federal budget charlotte casiraghi deficits by $124 billion over the 2010 2019 period and by roughly one-half of 1 percent of gross domestic product (GDP) over the ensuing decade (see the cost estimate for H.R. 4872, Reconciliation charlotte casiraghi Act of 2010 [Final Health Care Legislation], March 20, 2010). In the four years since those estimates were produced, there have been significant changes in the economic charlotte casiraghi outlook, in the health care and health care financing systems, in CBO and JCT s estimating methodologies, charlotte casiraghi in provisions of law that relate to the ACA, and in the implementation of the ACA as guided charlotte casiraghi by judicial decisions and administrative actions. All of those changes could affect the impact of the ACA on budget deficits, potentially in significant ways.
In response to the request for an estimate of the net impact on the deficit of the ACA, the following points are important: Based on revisions to the estimated budgetary effects charlotte casiraghi of aspects of the ACA that CBO and JCT have analyzed, the agencies have no reason to think that their initial assessment charlotte casiraghi that the ACA would reduce budget deficits was incorrect. However, the incremental budgetary effects of many provisions of the ACA are embedded in CBO s baseline projections for preexisting charlotte casiraghi programs and tax revenues, and they cannot be separately identified using the agencies normal estimating procedures which are generally based on data that reflect all of the provisions charlotte casiraghi of current law, including the ACA. A retrospective analysis of the effects of a current law is very different from a cost estimate for proposed legislation, particularly because it requires formulation of a counterfactual benchmark representing what would have happened if the law had not been enacted a challenging undertaking that is beyond the scope of CBO s usual analyses. Therefore, CBO and JCT cannot readily provide a retrospective analysis of the ACA that is analogous to the cost estimate provided by the agencies in 2010. That problem is not unique to the ACA but is common to most legislation that affects preexisting federal programs.
Consistent with their statutory responsibilities, CBO and JCT can continue to estimate the effects charlotte casiraghi of prospective legislative actions, such as proposals to modify provisions of the ACA or to repeal the law entirely. Because of the complexities involved in implementing a repeal of the ACA, the budgetary effects of repealing the act at this time would not simply be the opposite of the budgetary effects of the ACA itself. Identifying the Budgetary Effects of the Affordable Care Act.
The principal obstacle to producing a new estimate for the ACA is that CBO s cost estimates represent the budgetary effects of legislation relative to the current-law baseline. Because the ACA is part of current law, its budgetary effects would now need to be estimated relative to a counterfactual benchmark that excluded charlotte casiraghi the ACA. CBO does not construct such a counterfactual benchmark for all of the ACA, and attempting to do so would raise significant challenges.
Under CBO and JCT s normal procedures, the agencies still produce separate estimates charlotte casiraghi of the effects of the ACA s provisions related to insurance coverage , in part because those provisions established entirely new programs or components of programs and in part because those provisions are mostly being implemented in 2014 or later. In particular, the subsidies to be provided through insurance exchanges and the costs of expanded Medicaid eligibility are not part of the flow of budget data for preexisting programs. Hence, their budgetary consequences can be isolated and reassessed, and the counterfactual what would have happened to those components of the budget in the absence of the ACA is clear: Those amounts would have been zero. CBO and JCT have published updated estimates of the effects of those provisions charlotte casiraghi numerous times since 2010 (see Updated Estimates of the Effects of the Insurance Coverage Provisions of the Affordable Care Act, April 2014 ). Over time, the effects of the coverage charlotte casiraghi provisions that are not separately identified in flows of budgetary charlotte casiraghi data will become increasingly difficult to isolate.
By contrast, the ACA s provisions that are not related to insurance coverage largely modified existing federal programs and made changes to the existing tax