The U.S. Department of Health and Human Services (HHS) and other agencies responsible for implementing the Patient Protection and Affordable Care Act of 2010 (PPACA) may not be doing such a great job of analyzing the effects of the PPACA regulations they are developing.
Christopher Conover, a researcher at the Center for Health Policy and Inequalities Research at Duke University, and Jerry Ellig, a researcher at the Mercatus Center at George Mason University, gave that assessment in a PPACA implementation working paper distributed by Mercatus.
Conover and Ellig focus on implementation of eight major PPACA regulations that were issued as interim final rules in 2010, including the Coverage of Preventive Services, Medical Loss Ratio Requirements and Preexisting Condition Insurance Plan regulations.
Federal law requires agencies to analyze the cost of implementing regulations and other possible effects, and to also look at alternatives to the regulations.
The researchers found that benefit estimates were biased upward in connection with four of the interim final regulations and downward in connection with three.
"Costs were underestimated for all eight regulations," the researchers say. "In general, downward biases in estimated costs arose to due to a failure to consider an entire category of costs."
None of the cost estimates took into account the "efficiency losses associated with the higher taxes required to finance regulations or subsidize some activity, despite the sizable potential magnitude of such costs," the researchers say.
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