CBO Issues Revised Cost Estimate for the Senate Health Care Bill

A report (pdf) issued on March 11 by the Congressional Budget Office (CBO) states that the health care overhaul bill that cleared the Senate in December 2009 would cost $875 billion over a 10-year period, an estimate exceeding the $871 price tag published in an earlier CBO report. Additionally, the CBO and the Joint Committee on Taxation (JCT) estimate that the Patient Protection and Affordable Care Act (H.R. 3590) would yield a net reduction of the federal deficits by $118 billion from 2010-2019, down from the previously-reported $132 billion reduction. The revised estimate was performed to consider all of the amendments that were adopted, the new proposed enactment date, the impact of limiting contributions to flexible spending accounts, and certain technical revisions.

The bill does not completely take into consideration discretionary costs of the measure, which include appropriations spending. Only direct spending – costs associated with the legislation only – is factored into the CBO’s cost estimate. The report did, however, guess that an estimated $5 billion to $10 billion would be spent on administrative costs over the 10-year period by each the Internal Revenue Service and at the Department of Health and Human Services. The CBO also estimates that at least $50 billion could be spent on future discretionary spending for a number of grant programs and other provisions contained in the bill.

Other cost estimates outlined in the initial CBO report on the Senate bill – such as the bill’s impact on health insurance premiums – would remain relatively unchanged, according to the report. Changes to Senate bill under consideration to secure House support are likely to raise the cost of the bill.

This entry was written by Ilyse Schuman.

Photo credit:  Andriy Solovyov