In compliance with a request by U.S. Rep. Henry Waxman (D-CA), on May 26, the Congressional Budget Office (CBO) provided an analysis of legislation that would permanently prevent the use of funds appropriated to implement the national health care reform law.  Previously, the CBO and the Joint Committee on Taxation estimated that temporarily preventing the use of those funds through the remainder of FY2011 would reduce current fiscal year deficits by $1.4 billion but increase deficits by $6 billion through FY2021.  The CBO asserts that it is not possible to determine the specific impact of a permanent block on health reform implementation spending but estimates that such a change would have a “much greater” budgetary impact than the temporary measure.  The authors project that the legislation could potentially end Medicare prescription drug coverage under the Medicare Prescription Drug Program (Part D), because changes to Part D outlined under health reform could not be implemented, particularly the closure of the “doughnut hole” coverage gap.  The authors also estimate that such legislation could prevent the Centers for Medicare & Medicaid Services (CMS) from making annual Medicare reimbursement rate adjustments, prevent enforcement of the law’s individual mandate, preclude the U.S. Department of Health and Human Services (HHS) from establishing health exchanges in states that do not establish their own, and prevent the implementation of recommendations issued by the Medicare Independent Payment Advisory Board (IPAB).

From the report:

The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have previously estimated the effects of legislation that would temporarily prevent the use of appropriated funds to implement PPACA and the Reconciliation Act. Specifically, earlier this year, CBO and JCT estimated the budgetary effects of enacting section 4017 of H.R. 1, the Full-Year Continuing Resolution Act, as passed by the House of Representatives on February 19, 2011. That provision would have prevented the use of funds appropriated in H.R. 1—that is, any funding for fiscal year 2011—to implement PPACA and the Reconciliation Act. CBO and JCT found that such a temporary prohibition, extending through the remainder of fiscal year 2011, would reduce the budget deficit by about $1.4 billion in 2011 but would increase deficits by almost $6 billion over the 2011-2021 period.The H.R. 1 was ultimately supplanted by H. R. 1473, the Department of Defense and Continuing Appropriations Act of 2011, which did not include a provision like section 4017 of H.R. 1.

Full report: Budgetary Effects of Legislation Preventing the Use of Appropriated Funds to Implement the Affordable Care Act (PDF | 87 KB)

Congressional Budget Office. (2011). Budgetary effects of legislation preventing the use of appropriated funds to implement the Affordable Care Act.