As Congressional Democrats debate what will be in and what will be out of a multi-trillion-dollar reconciliation package, many lawmakers and the general public remain in the dark about how much significant expansions of Medicare, Medicaid, and the Affordable Care Act’s premium tax credits (PTCs) will cost taxpayers. Lawmakers from both parties -- and the taxpaying public -- deserve full answers to these questions before Congress votes to advance a reconciliation bill to President Biden.
Based on prior estimates of health care expansion plans, just four health care programs alone being contemplated by Congressional Democrats and the Biden administration may add up to nearly $1 trillion of 10-year costs:
- Up to $350 billion for expansion of Medicare coverage to dental, vision, and hearing care; this is based on a 2019 Congressional Budget Office (CBO) estimate of similar legislation[1]
- Up to $300 billion for expansion of Medicaid coverage to individuals in a dozen states that have chosen not to expand Medicaid; this is based on estimates shared by The Washington Post
- Up to $210 billion for permanently expanding premium tax credits (PTCs) that subsidize private health coverage; this is based on a 2020 CBO estimate of similar legislation; and
- Up to $90 billion for a $10 billion per-year reinsurance program in the House reconciliation bill that would start in 2023.
Of course, the headline cost may end up lower if lawmakers play timing tricks with these expansion plans. NTU previously estimated that timing tricks could -- on paper -- shave off $250 billion to $350 billion in headline costs for Medicare and Medicaid expansion. Reducing the number of years for PTC expansion, rather than making the expansion permanent, could shave tens of billions of dollars more off the headline figure. This budget magic could make an up to $1 trillion expansion of federal health programs and subsidies appear to cost half that, though it’s likely that Congress will later enact further extensions of these policies.
Unfortunately, many lawmakers, budget watchdogs like NTU, and the nation’s taxpayers are in the dark about the potential budget impact of health reconciliation plans because there is no official and public CBO score for such plans yet. Reps. Jason Smith (R-MO), Kevin Brady (R-TX), Cathy McMorris Rodgers (R-WA), and Virginia Foxx (R-NC) -- the Republicans leaders of the Budget, Ways and Means, Energy and Commerce, and Education and Labor committees, respectively -- recently wrote to CBO Director Phillip Swagel, asking him to report to the public on some important questions regarding the budget impact of these health programs.
This effort by lawmakers is important. Though CBO recently sent out a distress signal to Congress earlier this week, effectively telling Senate Minority Leader Mitch McConnell (R-KY) that the agency is overworked and cannot produce timely cost estimates for the House’s reconciliation legislation, taxpayers and lawmakers in both parties deserve a full accounting of the spending and revenue impacts of the complete reconciliation bill before they vote on it. If CBO is overworked then so be it, but lawmakers should hit the pause button on consideration of a multi trillion-dollar piece of legislation until they have complete answers from the budget scorekeepers.
The letter from Reps. Smith, Brady, McMorris Rodgers, and Foxx also asks important questions about who will benefit from the proposed expansions of federal health programs. Lawmakers should not raise taxes that fall in part on low-income and middle class households or adversely affect U.S. tax competitiveness in order to subsidize the health insurance premiums of six-figure households, or the dental, vision, and hearing coverage of well-to-do seniors that currently have (or can afford) coverage through private insurance or Medicare Advantage.
NTU urges lawmakers not to advance reconciliation legislation in either chamber until a detailed and complete cost estimate for the entire reconciliation bill is available from CBO.
[1] Of note, the 2019 legislation would have expanded Medicare to dental coverage starting in 2025, while the House version of the reconciliation bill expands Medicare to dental coverage starting in 2028. This likely reduces the topline cost of expanding Medicare coverage to dental, vision, and hearing care, but without a CBO score taxpayers are in the dark about potential costs of the reconciliation health agenda.