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Life Health > Long-Term Care Planning

PPACA: CBO Skeptical about Cost Savings

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The Affordable Care Act may have only a “very limited” effect on unnecessary U.S. health care spending in the coming decade, according to Congressional Budget Office (CBO) analysts.

The CBO analysts have included that prediction in a written Affordable Care Act presentation that CBO Director Douglas Elmendorf used today in an appearance at the University of Southern California.


The Affordable Care Act, the federal legislative package that includes the Patient Protection and Affordable Care Act (PPACA), provides mechanisms for expanding access to government health insurance programs and subsidies for the purchases of health insurance, cutting Medicare spending and holding down other health care spending.

“The legislation will decrease spending on health care for people who would be insured with or without the legislation,” CBO analysts say in the presentation. “The magnitude of that decrease, and the extent to which it will be achieved through greater efficiencies in the delivery of care or through reductions in access to care or quality of care, are unclear.”

The effects of many other provisions are also hard to predict, the analysts conclude.

Reasons for optimism about the ability of government policy to reduce unnecessary spending include the belief that “there seems to be a lot of unnecessary spending” and a belief that a “consensus exists about broad types of changes,” the analysts say.

The analysts also see reasons for skepticism.

“Someone’s wasted spending is someone’s income,” the analysts say.

Cutting spending probably will require fundamental changes in organization and delivery of health care that may not happen, and someone may have to make sensitive decisions about reducing use of services that do not improve health, the analysts say.


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