Congressional Budget Office

The federal budget is on an unsustainable path, primarily because of the rising cost of health care.

Projected Federal Spending Under One Fiscal Scenario
(Percentage of gross domestic product)
This figure, an area chart, shows federal spending from 1962 through 2082 under one scenario for Medicare and Medicaid, Social Security, and all other programs (excluding debt service). Most prominently, net federal spending on Medicare and Medicaid rises from 4 percent of gross domestic product in 2007 to almost 20 percent in 2082.

This figure, an area chart, shows federal spending from 1962 through 2082 under one scenario for Medicare and Medicaid, Social Security, and all other programs (excluding debt service). Most prominently, net federal spending on Medicare and Medicaid rises from 4 percent of gross domestic product in 2007 to almost 20 percent in 2082.

From the Director

Health care reform is a central issue in the 111th Congress, driven especially by growing concern about the number of people without insurance coverage and continual increases in cost. As the committees of principal jurisdiction for health care work on comprehensive proposals, analyzing them and helping the Congress understand their effects are a top priority for CBO.

CBO and the staff of the Joint Committee on Taxation (JCT) worked together to produce a preliminary analysis of H.R. 3200, the America's Affordable Health Choices Act of 2009, as introduced by the House Tri-Committee Group on July 14. These latest figures released on July 17 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. In addition, the figures do not include certain costs that the government would incur to administer the proposed changes and the impact of the bill's 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 and builds upon CBO's July 14 preliminary analysis of the major provisions related to health insurance coverage that are contained in the bill.

On July 7, CBO produced a preliminary analysis of the likely effects of substantially expanding Medicaid under a Senate bill by the Health, Education, Labor, and Pensions (HELP) Committee, the Affordable Health Choices Act--although it is important to note that CBO's analysis did not constitute a full estimate of the cost of a specific change to the program.

On July 2, CBO and the JCT staff also collaborated to produce a preliminary analysis of the major provisions related to health insurance coverage contained in the Affordable Health Choices Act. The estimates are based on provisions from title 1 of the draft legislation, released by HELP Committee on June 9. Among other things, the draft legislation would establish insurance exchanges (called "gateways") through which individuals and families could purchase health insurance coverage. The proposed bill also would provide federal subsidies to substantially lower the cost of that coverage for some enrollees.

CBO will continue to work with the Senate and House committees involved in health care reform to provide estimates of costs and other effects as legislation is developed. You will be able to find those analyses here.

Panel of Health Advisers

Consisting of acknowledged experts in health care, CBO's panel of health advisers meets periodically to examine research in health policy and to advise the agency on its analyses of health care issues. The panel thus helps to further the reliability, professional quality, and transparency of the agency's work.

Inside CBO

Experts from across the agency come together to analyze health care: estimating the budgetary impacts of federal health care programs, preparing studies of health policy issues, and estimating the budgetary and other effects of proposals to alter the health care system. Two units in the Budget Analysis Division focus particularly on estimating the cost of proposed health care legislation and projecting spending for federal health care programs. The Health and Human Resources Division conducts studies of health issues, including Medicare, Medicaid, pharmaceuticals, public health, and private health markets; it also develops models that underlie cost estimates. The National Security Division conducts studies of the health care provided by the Departments of Defense and Veterans Affairs. The Microeconomic Studies Division also analyzes health issues, especially those related to competition or market structure, including most recently prescription drug pricing and research and development in the pharmaceutical industry.

CBO continually seeks health economists, analysts, and research assistants for health-related programs. The agency has also devoted an internship to health policy, which is for graduate students. It may be available on a summer, semester, or year-long basis depending on work needs and students' availability.

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