Budget office predicts rocky start for health care law

The Obama administration has been publicly upbeat about the coming rollout of its health care law. But a new report from the nonpartisan Congressional Budget Office suggests that at least one set of influential observers anticipates some turbulence in the law’s first years.

On several important measures of the law’s success, CBO’s numbers are pessimistic compared with earlier estimates: Fewer uninsured people will get coverage, insurance options will be more limited, and more employers will stop covering their workers. Perhaps most noteworthy, the report suggests that the new health insurance marketplaces set to launch later this year are unlikely to be completely ready in time.

That negativity came cloaked in the careful language of the budget office—what former Bush health official Tevi Troy called “heavy bureaucratese”—but the report signaled CBO officials are worried that key provisions of the law are not going to work as intended.

“They view the odds of success as diminishing sharply,” said Douglas Holtz-Eakin, the president of the conservative American Action Forum and a former CBO director.

The health insurance marketplaces, or exchanges, will be the place where individuals, families, and small businesses can shop for insurance using tax credits. They are a key element of the law, because they will be the place where uninsured Americans can purchase health plans.

Publicly, administration officials have promised that the new exchanges will be ready on time. In a characteristic statement, Gary Cohen, who runs the agency overseeing the exchanges, told the House Energy and Commerce Committee in December that they would open their doors for enrollment in October, as scheduled. But the CBO report expresses skepticism. The “change reflects the agencies’ judgment about a combination of factors, including the readiness of exchanges to provide a broad array of new insurance options, the ability of state Medicaid programs to absorb new beneficiaries, and people’s responses to the availability of new coverage.”

In plain language, that means CBO thinks the marketplaces won’t have many insurance choices, the Medicaid enrollment systems will not be ready for new people to enroll, and people will be less enthusiastic about signing up for new insurance options.

Critics have long been cautioning that the administration’s optimism was unwarranted. “A whole bunch of people have been saying for quite a while that these things are not going to be ready, and when they are ready they’re not going to be the be all and end all that people say they’re going to be,” said Troy, a senior fellow at the Hudson Institute.

The revised estimates only apply to the first two years of the law’s implementation—2014 and 2015. Over the long run, the CBO does expect the new marketplaces to work as they had previously predicted. But in 2014, it now anticipates only 7 million people will be insured through the marketplaces. That’s down 2 million from its last estimate, in July.

Dan Mendelson, the CEO of the consultancy Avalere Health, and a former White House budget official, said that the new estimates do not predict calamity, but they do reflect a growing awareness that implementation of the health law will not be easy.

“They are starting to adjust to reality, and reality is you have to work really hard to get people to sign up,” he said. “While I don’t think they are predicting a failure of the systems, they are acknowledging the realities that people do not sign up instantaneously.”

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download
  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care

    Download

When you download a report, your information may be shared with the underwriters of that document.