CBO, JCT share methods for analyzing legislative proposals impacting health insurance coverage

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) revealed in a recent report how they jointly analyze proposed legislation that would impact health insurance coverage for individuals younger than age 65, detailing how they develop analytic strategies, model a proposal’s effect, and finalize their analysis (CBO Report, February 2018).

Analytic strategy development

First, the CBO and JCT put together an analytic strategy. The agencies formally develop their strategy once the proposed legislation’s specifications become available, an official request for analysis has been made, and the CBO and JCT arrange the time to commence the analysis. However, the agencies also often work informally with Congressional staff during development of the proposal. The agencies begin by reviewing the policy specifications. The CBO and JCT consider how the proposed legislation would impact existing law and how the proposed legislation is different from earlier proposal drafts. The agencies work to verify that the Congressional staff’s intent is reflected in the language and then estimate the legislative effect by, namely, identifying how the proposal could affect health insurance coverage and the federal budget.

The CBO and JCT focus on the policy changes most likely to impact health insurance coverage or cost, ranging from the straight-forward to the more complex. Another key aspect the agencies consider is timing and what additional “administrative infrastructure” is necessary to bring about the changes of the proposed legislation—and how long it would take to do so. The timing element includes estimates of how other stakeholders (state governments, insurers, employers, etc.) would respond and how long it would take for them to implement the proposed changes. To help with their estimates, the agencies rely on past cases of legislative reform programs. Further, the agencies seek input from outside experts and existing evidence while maintaining the required confidentiality of a proposal.

Proposal effect modeling

Second, the CBO and JCT undertake modelling the impact of the proposed legislation. Primarily, the agencies rely on CBO’s health insurance simulation model (HISIM), Medicaid enrollment and cost models, and JCT’s individual tax model. These models use data on health insurance coverage information for everyone younger than 65, Medicaid enrollment and expenditures, and detailed tax return information. The agencies also draw estimates based on information HISIM cannot project, namely, the behavior of states, employers, and insurers. These initial projections are incorporated as inputs into HISIM (state, employer, and individual enrollee behavior) or assessed outside HISIM (insurer behavior). CBO and JCT also use HISIM to estimate stakeholder responses to new coverage options. Medicaid enrollment and cost projections use HISIM estimates in addition to a more detailed Medicaid model and other methods. JCT usually provides estimates of proposed tax liability changes using its individual tax model.

Review

Finally, both the CBO and JCT engage in rigorous review of their respective analysis results in order to ensure objectivity and proper analysis. Specifically, they examine results of one or more years out of the 10-year projection period to ensure that the analysis is being computed as intended and compare results against previous analyses. The agencies also inspect for programming errors or unexplained results. The CBO and JCT consider changes to the results if there were different critical inputs. The agencies prepare a formal written estimate and explanation thereof and, before releasing it to Congress and the public, agency staff carefully review the report.

HELP committee advances public health bills

Among a series of bills voted on by the Senate Health, Education, Labor and Pensions (HELP) committee on April 26, 2017 were bills focused on access to medications in emergency situations (Protecting Patient Access to Emergency Medications Act of 2017 (S. 916)) and hearing loss screening for children (Early Hearing Detection and Intervention Act (S. 652)). Also sent to the Senate floor were two other public health bills which would create a national commission on clinical care (S. 920) and better prepare the public health community for Zika and other mosquito-borne diseases (S. 849).

S. 916

The Protecting Patient Access to Emergency Medications Act seeks to amend the Controlled Substances Act to make it easier for first responders and those providing emergency medical services to have access to “time-sensitive and life-saving treatments.” The bill is sponsored by Sen. Bill Cassidy (R-La) and co-sponsored by Sens. Michael F. Bennet (D-Colo), Roy Blunt (R-Mo), and Al Franken (D-Minn).

S. 652

The Early Hearing Detection and Intervention Act is sponsored by Sen. Rob Portman (R-Ohio) and co-sponsored by Sens. Tim Kaine (D-Va), Sheldon Whitehouse (D-RI), John Cornyn (R-Texas, Sherrod Brown (D-Ohio), and Richard Blumenthal (D-Conn). The bill aims to improve state-based efforts to screen newborns, infants, and young children with hearing loss screening and link them to follow-up care if needed by amending sec. 399M of the Public Health Service Act. The Health Resources and Services Administration (HRSA), the Centers for Disease Control and Preventions, and the National Institutes of Health would need to coordinate and collaborate these efforts with those administering such programs as the Medicaid Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program, for example.

Highlight on Pennsylvania: Better Medicaid spending through technology

Pennsylvania lawmakers introduced legislation attempting to reduce spending and improve patient care within the state’s Medicaid program. Under the proposed legislation, Senate Bill 600, the state would adopt new technology to monitor and identify areas of unnecessary or wasteful health care services and procedures. The state would have 90 days within enactment of the bill to pick a technology company and implement the monitoring. Lawmakers noted that by providing more information, patients and providers, alike, could make better health care decisions. Consequently, this would reduce Medicaid spending. Pennsylvania is one of the highest spenders per Medicaid enrollee in the U.S., with one out of every four dollars in the state’s annual budget accounted for by Medicaid.

The lawmakers have started to review tech companies with prior experience in collecting and monitoring patients to improve care, notably companies that have worked with Alaska’s Medicaid program. The tech company involved  reduced misdiagnosis rates, improved outpatient care, cut waste, and reduced Medicaid expenditures in Alaska by over 14 percent. According to Pennsylvania lawmakers, a similar program could generate between $2 billion and $4 billion in annual savings.

In fiscal year 2015-16, the federal government spent about $15.3 billion on Medicaid in Pennsylvania, while the state spent about $10.6 billion, bringing the total to $25.9 billion; the state’s Department of Health and Human Services budget over the past few years has increased by about $500 million annually. The influx of approximately 700,000 new patients into the Medicaid system is a 20 percent increase and has cost an additional $4.6 billion. State lawmakers are concerned that the push for health care reform by the federal government will result in a cut in the federal portion of Medicaid to the state.