Latest CBO Report on Health Law Adds to Business Uncertainty

Photograph by William B. Plowman/Redux

Demonstrators on the steps of the Supreme Court protest against the Affordable Care Act in Washington.

The Congressional Budget Office’s new estimates of the budgetary impact of the Affordable Care Act, made in the wake of the Supreme Court’s ruling last month, glides right by one obvious fact: the budget analysts really have no idea how the court ruling will affect their previous estimates.

The CBO report says very clearly that “what states will be able to do and what they will decide to do are both highly uncertain.” Translation? They don’t know any more than anyone else right now about how states will act, now that the high court has determined that the federal government can’t force states to participate in the expansion of Medicaid by withholding the federal share for existing activities.

CBO isn’t to blame for this uncertainty. Rather, they should be commended for their candor in acknowledging the degree of uncertainty that remains. Most news reports and commentaries on the new CBO findings have downplayed or ignored this problem.

Some even claimed to find clarity in the court’s decision. The Fiscal Times said that “the Supreme Court ruling largely upholding President Obama’s health care reform plan may offer businesses a measure of needed certainty.” The technology research company Gartner Inc. posted on its website how the court’s ruling “ends a long period of uncertainty for U.S. healthcare stakeholders.”

Ironically, each statement was immediately followed by caveats about the degree of the certainty rendered by the court. The Fiscal Times noted that “it will be months, if not longer, before the new shape of the American health care system really becomes clear.” The Gartner analysis also noted how the law “could still be modified or revised, and could be affected by the November 2012 federal elections.”

The impact of this uncertainty has more than just budgetary or political effects. The desire of any business for certainty in order to make important decisions and investments is critical. Regardless of individual or corporate views supporting or opposing the Affordable Care Act, companies need to know how to comply with the law and make their businesses as profitable as possible within those rules.

Unfortunately, the new estimates from the CBO only reaffirm the concerns voiced by many that the court decision, while giving some limited guidance to health-care providers and investors, left many big questions without clear answers.

Matt Barry is the health analyst team leader for Bloomberg Government.

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