Health-care wonks and political spinmeisters eagerly awaited a new government analysis Tuesday of how the Supreme Court‘s ruling on the Affordable Care Act’s Medicaid expansion will affect the law. But the Congressional Budget Office’s report doesn’t provide much clarity.
By definition, CBO number-crunching is an attempt to predict an uncertain future. Yet Tuesday’s report was particularly murky. That’s because implementation of the Affordable Care Act is not in the hands of one entity. The law was deliberately written to cede much of this responsibility to the states. With the Medicaid expansion now optional, states could react in all sorts of ways. Predicting how governors and legislatures might act in a tough political environment, let alone years into the future, is an impossible task.
But CBO (and the Joint Committee on Taxation) took a shot. Here’s how they describe the challenge:
…CBO and JCT’s estimates reflect an assessment of the probabilities of difference outcomes (without any explicit prediction of which states make which choices) and are, in their judgment, in the middle of the distribution of possible outcomes. Future legal or administrative actions will certainly affect those outcomes; CBO and JCT’s assessment in this analysis should not be viewed as representing a single definitive interpretation of how the ACA should or will be implemented in light of the Court’s decision.
With that enormous caveat in mind, here’s the CBO’s best guess for how the newly optional Medicaid program will affect the ACA.
The parts of the law that pertain to expanding health insurance coverage will cost $84 billion less over the next 10 years than if the Medicaid expansion, which was to extend insurance coverage to 16 million Americans, has been compulsory for every state. Some states will expand their Medicaid programs as the ACA originally intended; some will expand their Medicaid programs less; others will expand their programs later than the initial timetable of 2014; and some states will forgo an expansion and maintain their current Medicaid programs. According to the CBO, this means about 6 million fewer Americans will be able to get health insurance through Medicaid. About half of these people will instead get federal subsidies to buy private insurance, which is more expensive than Medicaid. But the other half will remain uninsured, offsetting the extra cost and saving the government money in the end. In other words, it will cost less to do less.
The 3 million Americans who will now stay uninsured because of the new Medicaid-opt out will be among the poorest Americans–mostly poor non-parents and poor parents who live in states that already have extremely limited Medicaid eligibility rules.
Whether this will all play out as the CBO predicts is, as the authors note, total guesswork. Although some governors, like Republicans Rick Perry of Texas and Rick Scott of Florida, have vowed not to expand their Medicaid programs, political circumstances could change. They could be voted out of office or buckle under pressure from special interest groups, like hospitals, that favor the Medicaid expansion. Likewise, the federal government could write or rewrite Medicaid regulations to offer states more flexibility in implementing such programs, which could cause fewer people to be left out of the system. And states that opt in to the Medicaid expansion could decide to opt out later.
So there’s no shortage of uncertainty built into the Affordable Care Act. As I wrote recently, part of this is by design. Flexible policy that can serve different populations and economic conditions is generally better policy. But uncertainty carries some risk as well–most consequentially, in this case, for poor Americans who still don’t know if they’ll be able to get new insurance coverage under the ACA.