How Budgetary Assumptions Are Handcuffing Congress on Health Policy

Estimating probabilities is an essential part of the Congressional Budget Office’s work. This is true in scoring the pending tax legislation, it being necessary to make innumerable assumptions regarding tax revenue collections based on projected changes in the behavior of taxpayers over the next decade and beyond. Similarly, CBO must estimate the costs of programs like federal crop insurance by using experience to calculate the likelihood of droughts, floods and other unforeseeable events that can affect supply, demand and price.

Where CBO has greater difficulty in fulfilling its mission – and where this affects Congress’s necessary ability to construct policy – is with new health care programs that do not have a history that allows probabilistic estimates. This is the case with both the Independent Payment Advisory Board and the Center for Medicare and Medicaid Innovation.