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CBO: Requiring feds to buy exchange coverage will raise deficit

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Legislation that requires more federal officials to buy insurance through the health exchanges would add $978 million to the deficit during the next decade, according to the Congressional Budget Office.    

To cut costs by adjusting eligibility, section 142 of the Continuing Appropriations Resolution, 2014 (H.J. Resolution 59) amends the Affordable Care Act to extend the requirement for participation in a state health insurance exchange to the president, vice president, executive branch political appointees, employees of congressional committees and leadership offices of Congress.

This requirement now applies to members of Congress and their staff. The provision would make more federal officials lose benefit eligibility under the Federal Employees Health Benefits Program. The legislation also would prohibit any governmental contribution to or subsidy for the health insurance coverage of these officials and their employees.

"CBO estimates that implementing section 142 of H.J. Res. 59 would yield discretionary savings … of $833 million over the 2014-2018 period and about $2 billion over the 2014-2023 period," CBO Director Douglas W. Elmendorf wrote in the letter to Sen. Jeff Sessions (R-Ala.).  

Additionally, the legislation would incentivize federal employees to retire earlier so they could avoid losing access to employer contributions for health insurance, leading to a $61 million increase in federal retirement payments from 2014 to 2023, according to the CBO letter.

But enacting the legislation would increase direct spending and reduce revenues. "Together, changes in these two components of the budget would increase the deficit by $474 million over the 2014-2018 period and by $978 million over the 2014-2013 period," the CBO stated.

The CBO also has noted that raising the Medicare eligibility age from 65 to 67 as a way to reduce the deficit would save far less money than previously thought, a change supported by healthcare CEOs.

For more:
- read the CBO letter (.pdf)

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