CBO's Legislation Scoring Process Allows Congressional Gaming Of The Process To Hide True Program Costs And Future Deficits: Time For CBO To Switch To Present Value Model Of Legislative Scoring Or At Least To Provide Rolling 10-Year Costs Estimates In The Initial Projections: CBO's Scoring Understates Future Spending And Budgetary Deficits of Proposed Legislation

Posted by Milton Recht:

Recently, CBO looked at the change in the projected net costs of the Affordable Care Act's coverage provisions. Despite, little change in the future yearly projected costs of the ACA since its passage, CBO says the total net costs has risen 69 Percent from $788 billion to $1329 billion. The reason is simple. CBO only counts the costs of the first 10 years of any legislation, starting in the current year. Many of the costs of the Obama healthcare legislation were back-ended beyond the 10 year window and were not counted as part of the costs by CBO at the time of discussion of the pros and cons of the legislation, although CBO did have projections of the amounts beyond the 10 year cost analysis window. CBO's costs projections of the healthcare law have now risen because the higher unchanged back-ended costs are now, 4 years later, included in the analysis.

The CBO 10 year window of analysis process allowed the Congress and the President to game the analysis and the legislative discussion by putting many costs of the program outside of CBO's analytical time frame, its reports and the media's news stories.

A much more financially sound method of analysis would have been to include the costs beyond the 10 year window and for comparative program purposes use present value of the costs, or at a minimum provide a chart of the rolling 10 year total of the costs beyond the initial year.

From "How Has CBO’s Estimate of the Net Budgetary Impact of the Affordable Care Act’s Health Insurance Coverage Provisions Changed Over Time?" by Jessica Banthin & Sarah Masi:

Changes in the Estimated Budgetary Impact of the ACA’s Coverage Provisions Since March 2010
When the ACA and other proposals that led up to that legislation were being considered by the Congress in 2009 and 2010, CBO and JCT prepared estimates of those proposals’ budgetary effects over the 2010–2019 period. In the estimate prepared in March 2010, CBO and JCT projected that the provisions of the ACA related to health insurance coverage would cost the federal government $788 billion between 2010 and 2019. The latest projections extend the original ones by four years, corresponding to the shift in the regular 10-year projection period since 2009, and the estimated cost of the ACA’s insurance coverage provisions between 2013 and 2023 is $1,329 billion. However, the projections for each given year have changed little, on net, since March 2010....