Congress must ensure health care cost estimates are accurate

OPINION:

Congress relies on cost estimates from the Congressional Budget Office (CBO) to determine the financial impact of proposed health care legislation. When CBO’s projections are off the mark, inaccurate cost estimates lead to unexpected deficits, programmatic instability, and unintended consequences for taxpayers, patients, providers, and lawmakers.

That’s why we, members of the House Committee on the Budget, introduced the Healthy Equipping and Lending Technical Help Panel (HEALTH Panel) Act, which contains a commonsense reform to ensure that Congress receives the most accurate and up-to-date health care policy analysis from CBO. CBO’s estimates shape everything from health insurance regulations to Medicare and Medicaid reforms; for the sake of our parents, children, and elderly members of society we must get this right.

For much of CBO’s history, its health care projections have missed the mark, significantly affecting legislative decision making. CBO is tasked with producing impartial, objective cost estimates; but the direction of its inaccuracies over the past two decades, combined with the opaque “black-box” nature of its work, has raised questions about whether CBO’s estimates tend to skew in favor of government-run programs and against pro-patient, market-based solutions. Erosion of trust in CBO estimates has real-world impacts, and our legislation aims to put those questions to rest by strengthening confidence in CBO and its vitally important work.

Inaccuracies in CBO’s estimates on Medicare Part D, and the contrasting inaccuracies in its estimates for the Affordable Care Act (ACA), illustrate the need for reform. More than 20 years ago, CBO overestimated the cost of President Bush’s signature health policy achievement the creation of the Medicare Prescription Drug Benefit by 100%. In the first 10 years of the program, Medicare Part D, which relies on plan competition to keep expenses down, cost $353 billion less than CBO’s original estimate.

This same pattern of inaccuracies holds true for more detailed CBO cost estimates. For example, when the so-called Center for Medicare & Medicaid Innovation (CMMI) was set up under the ACA, CBO originally projected that it would reduce spending by $2.8 billion. In 2023, CBO updated its estimate to recognize that the CMMI actually increased spending by more than $5.4 billion. Other technocratic policy proposals, such as expanding drug price controls in Medicare, have been given overly optimistic savings projections that don’t fully account for how entrepreneurs, large pharmaceutical product developers, and markets adapt to new regulations, while likely underestimating negative innovation impacts.

Health care accounts for one-quarter of federal spending. Any miscalculations in cost estimates result in billions of unintended federal government expenses. Without proper oversight and expert review, budgetary miscalculations will worsen an already strained fiscal environment.

We recognize that CBO’s task of producing neutral and objective cost estimates is made even more difficult due to the complexity of the health care system. Unlike other policy areas, health care involves a web of economic, regulatory, and behavioral factors that interact in complicated ways, impacting the accuracy of spending projections.

That is why we are offering a commonsense solution in the HEALTH Panel Act, which creates a formal structure through which a wider range of external experts would continuously inform CBO’s process with the best available data and analysis, while simultaneously requiring basic transparency in CBO’s methods and output.

The HEALTH Panel Act takes the existing, albeit informal, CBO Panel of Health Advisers and codifies it into law, aiming to bring greater transparency and broad expertise to CBO’s estimates. By implementing these reforms, the HEALTH Panel Act will improve the accuracy of CBO’s work, providing Congress with better data and tools to craft fiscally responsible, pragmatic health policy.

At a time when the national debt exceeds $36 trillion, ensuring the accuracy of federal health care spending projections is critical. When CBO underestimates costs, taxpayers are left footing the surprise bill. When it overestimates savings, Congress may enact policies based on unrealistic expectations. This affects access to care, affordability, and the sustainability of government health programs.

The HEALTH Panel Act is a necessary step toward greater accountability in how Congress evaluates health care policy. By ensuring that lawmakers have the most accurate fiscal data at their disposal, members of Congress can better safeguard taxpayer dollars while improving health care policymaking.

• Rep. Buddy Carter represents Georgia’s 1st District and chairs the House Energy and Commerce Subcommittee on Health. He is a career pharmacist. Rep. Ron Estes represents Kansas’ 4th District and chairs the House Ways and Means Social Security Subcommittee.