At the request of House Appropriations Committee Ranking Member Jerry Lewis (R-CA), the Congressional Budget Office (CBO) has prepared a new analysis of the Patient Protection and Affordable Care Act (PPACA) and its budgetary effects.

The analysis concerns potential discretionary spending under PPACA, with an update from the CBO's analysis of March 13, 2010. This includes the specified authorization amounts and the programs and activities for which there are no identified funding levels. Rather, the legislation authorizes appropriating "such sums as may be necessary."

The discretionary costs arise from new programs and activities and also new funding for existing programs. Because of the way the legislation is structured, the future effects on discretionary funding are subject to future actions on appropriation, meaning that the costs can be greater or lesser in the future, especially because for many items there is no specific amount of funding specified.
In its analysis, the CBO was not able to provide an estimate for all potential discretionary costs associated with PPACA, but for some major components costs. The costs fall into three general categories: the cost for federal agencies to implement the new policies in the PPACA; grants and program spending that has specified funding levels for one or more years; grant and other program spending with no specific funding levels in the legislation. While CBO estimates the total authorized costs in the first two categories may exceed $115 billion in the 2010-2019 period, it does not have an estimate of costs for the third category.

The first category of CBO's estimate regarding administrative and other costs for federal agencies involves implementation of the PPACA, where the costs would be funded through Congressional appropriation. This includes the costs to the Internal Revenue Service (for implementing eligibility determination, documentation, and verification processes); the estimate is between $5 billion and $10 billion over ten years.

Costs to the Department of Health and Human Services, particularly the Centers for Medicare and Medicaid Services, as well as the Office of Personnel Management, involve the implementation changes in Medicare, Medicaid, and the Children's Health Insurance Program, and some reforms to the private insurance market. CBO estimates these costs to be $5 billion to $10 billion over 10 years.

The second category of explicit authorizations involves items for which the PPACA has specified an authorized amount of funding for at least one year, and includes items where funding had existed under previous law and the PPACA has extended the authority for more funding. These include items such as the extension of Medicare's rural hospital flexibility program and federally qualified health center grants. The CBO estimates those specified and estimated amounts to be $105 billion over the 2010-2019 period.

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