Presentation to AcademyHealth Annual Research Meeting Jessica Banthin, Senior Adviso

1. Congressional Budget Office
Understanding CBO’s Medicaid Coverage
Projections under the Affordable Care Act
Presentation to AcademyHealth Annual Research Meeting
Jessica Banthin, Senior Advisor
June 23, 2013
This presentation provides information published in several past CBO reports, including Updated
Estimates for the Insurance Coverage Provisions of the Affordable Care Act ( March 13, 2012), Estimates
for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court
Decision (July 24, 2012), and Updated Budget Projections: Fiscal Years 2013 to 2023 (May 14, 2013). See
http://www.cbo.gov/publication/43076 , http://www.cbo.gov/publication/43472 , and
http://www.cbo.gov/publication/44172

2. C O N G R E S S I O N A L B U D G E T O F F I C E 1
Why did CBO’s Projections of Medicaid Enrollment
Decline over Time?
10
16
9
12
0
2
4
6
8
10
12
14
16
18
2014 2019
MillionsofPeople
Mar 2010 Projection May 2013 Projection

3. C O N G R E S S I O N A L B U D G E T O F F I C E 2
Affordable Care Act:
Key Provisions Affecting Medicaid Enrollment
■ Expanded eligibility for Medicaid up to 138 % of the federal
poverty line
■ Imposed a penalty tax on uninsured individuals
– Applies to those above the tax filing threshold
– Exempts certain groups
■ Established streamlined eligibility determination and
enrollment procedures
■ According to Supreme Court decision in June 2012, allowed
states to choose whether or not to expand Medicaid coverage

4. C O N G R E S S I O N A L B U D G E T O F F I C E 3
CBO Modeling Assumptions:
Main Drivers of Medicaid Enrollment
■ Number of people in income-eligible ranges and changes to the
distribution of income over the projection period
■ Access to employment-based coverage
■ Macroeconomic conditions (unemployment)
■ State choices on expansion
■ Direct effect of higher thresholds on the newly eligible
– Indirect effect on the previously eligible
■ Direct effect of penalty tax for being uninsured
– Compliance with tax laws
– Indirect effect of change in social norms, estimated to be smaller for
Medicaid-eligible individuals relative to those with higher incomes

5. C O N G R E S S I O N A L B U D G E T O F F I C E 4
CBO Estimates of the Impact of the Affordable Care Act
CBO usually updates its baseline projections 3 times a year and categorizes all
changes as due to:
■ changes in law,
■ changes in the economic forecast,
■ technical changes from new information, data, regulations, and changes in
modeling assumptions
This presentation will focus on 4 of those baseline estimates:
■ March 2010 – Initial ACA estimate
■ March 2012 – Spring baseline
■ July 2012 – Updated for Supreme Court decision
■ May 2013 – Spring baseline

6. C O N G R E S S I O N A L B U D G E T O F F I C E 5
Four Major Legislative Changes that Affected Coverage Projections
1. Legislation enacted in 2011 changed the conditions under which people would have
to repay premium assistance tax credits that were advanced based on estimated
income from tax returns for prior years.
2. The addition of nontaxable Social Security benefits to the definition of modified
adjusted gross income (MAGI) used for determining Medicaid eligibility was a change
in law enacted in late 2011.
3. The Supreme Court decision of June 28, 2012, had the effect of allowing states to
choose whether or not to expand Medicaid coverage pursuant to the ACA.
4. Lower marginal tax rates under the American Taxpayer Relief Act, enacted in early
2013, reduce the tax benefit associated with employment-based coverage.

7. C O N G R E S S I O N A L B U D G E T O F F I C E 6
Example of a Change in the Economic Forecast that
Affected Coverage Projections
Medicaid enrollment projections depend in part on economic forecasts of
unemployment.
■ The economic forecast issued in early 2012 projected a slower economic
recovery and higher unemployment throughout the projection period than
in the previous forecast, yielding an increase in the projected number of
people eligible for Medicaid and CHIP in the March 2012 baseline. It also
yielded a small net reduction in the number projected to be eligible for
insurance in the exchanges.

8. C O N G R E S S I O N A L B U D G E T O F F I C E 7
Some Technical Changes that Affected Coverage
Projections
■ CBO has slightly reduced its estimate of the rates at which
people will enroll in Medicaid and the insurance exchanges in
the years 2014 and 2015.
■ CBO has twice revised downwards the projected growth rate
for private premiums.
■ Other technical changes:
– Improvements in modeling the income distribution
– Increased employer responsiveness to alternative options

9. C O N G R E S S I O N A L B U D G E T O F F I C E 8
Medicaid Enrollment due to ACA:
CBO Baseline Projections
0
2
4
6
8
10
12
14
16
18
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
MillionsofPeople
Mar-10 Mar-12 Jul-12 May-13

10. C O N G R E S S I O N A L B U D G E T O F F I C E 9
Exchange Enrollment: CBO Baseline Projections
0
5
10
15
20
25
30
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
MillionsofPeople
Mar-10 Mar-12 Jul-12 May-13

11. C O N G R E S S I O N A L B U D G E T O F F I C E 10
Uninsured: CBO Baseline Projections
0
10
20
30
40
50
60
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
MillionsofPeople
Mar-10 Mar-12 Jul-12 May-13

12. C O N G R E S S I O N A L B U D G E T O F F I C E 11
Change in Employment-based Coverage due to ACA:
CBO Baseline Projections
-8
-6
-4
-2
0
2
4
6
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
MillionsofPeople
Mar-10 Mar-12 Jul-12 May-13

13. C O N G R E S S I O N A L B U D G E T O F F I C E 12
How CBO Models the Impact of the Supreme Court
Decision
Some states will not expand their Medicaid programs at all or will not expand coverage
to the full extent authorized by the ACA.
No state-by-state predictions; approximate shares of the affected population.
Key Factors in States’ Decisions:
• State budgetary pressures
• Current thresholds and number of people likely to enroll in expanded coverage
• Size of current payments for uncompensated care for the uninsured
• Pressure from providers who stand to gain when more people have coverage
• Future costs of newly eligible when federal match is reduced to 90 percent and
uncertainty of future federal support
In May 2013, CBO updated to reflect HHS guidance to states and recent developments
in state governments.

14. C O N G R E S S I O N A L B U D G E T O F F I C E 13
CBO’s allocation of potentially newly eligible Medicaid
beneficiaries by state expansion decisions
33%
50%
17%
Shares of population in 2022,
July 2012 Projection
Full expansion Partial expansion
No expansion
70%
10%
20%
Shares of population in 2023,
May 2013 Projection
Full expansion Partial expansion
No expansion

15. C O N G R E S S I O N A L B U D G E T O F F I C E 14
Conclusion
■ When outcomes are uncertain, CBO considers a range of
possible outcomes and aims for a projection that lies in the
middle of the distribution of those outcomes.
■ CBO carefully monitors new developments and incorporates
new information, data, and research that will enhance its
projections.
■ CBO pays close attention to states’ decisions on extending
Medicaid coverage.