Preliminary Analysis of the House Democrats' Health Reform Proposal

July 18, 2009

Yesterday CBO released a preliminary analysis, conducted with the staff of the Joint Committee on Taxation (JCT), of H.R. 3200, the Americas Affordable Health Choices Act of 2009, as introduced by several House committees on July 14. Earlier this week, CBO released a preliminary report on the health insurance coverage provisions of the bill; this latest report added analysis of the other provisions.

According to CBOs and JCTs assessment, enacting H.R. 3200 would result in a net increase in the federal budget deficit of $239 billion over the 2010-2019 period. That estimate reflects a projected 10-year cost of the bills insurance coverage provisions of $1,042 billion, partly offset by net spending changes that CBO estimates would save $219 billion over the same period, and by revenue provisions that JCT estimates would increase federal revenues by about $583 billion over those 10 years.

By the end of the 10-year period, in 2019, the coverage provisions would add $202 billion to the federal deficit, CBO and JCT estimate. That increase would be partially offset by net cost savings of $50 billion and additional revenues of $86 billion, resulting in a net increase in the deficit of an estimated $65 billion.

The figures released yesterday do not represent a complete cost estimate for the legislation. In particular, the estimated impact of the provisions related to health insurance coverage is based on specifications provided by the committee staff, rather than on a detailed analysis of the legislative language. (The estimates for other spending provisions reflect the specific legislative language. JCT has separately published its estimates of the effects of revenue provisions contained in H.R. 3200.) In addition, the figures do not include certain costs that the government would incur to administer the proposed changes and the impact of the bills provisions on other federal programs, and they do not reflect any modifications or amendments made after the bill was introduced. Nevertheless, this analysis reflects the major net budgetary effects of H.R. 3200.