CONGRESSIONAL BUDGET OFFICE Keith Hall, Director
U.S. Congress
Washington, DC 20515
September 22, 2015
Honorable Kevin McCarthy
Majority Leader
U.S. House of Representatives
Washington, DC 20515
Re: Budgetary Effects of Legislation That Would Permanently Prohibit the Availability of
Federal Funds to Planned Parenthood
Dear Mr. Leader:
On September 16, 2015, CBO transmitted a cost estimate for H.R. 3134, the Defund
Planned Parenthood Act of 2015, as introduced on July 21, 2015. H.R. 3134 would prohibit
federal funding from being made available to Planned Parenthood Federation of America
or any of its affiliates or clinics for a one-year period following enactment, unless such
entities certify that the affiliates or clinics will not perform, and will not provide any funds
to any other entity that performs, an abortion during such period. CBO estimates that
enacting H.R. 3134 would reduce direct spending by $235 million over the 2016-2025
period.
At the request of your staff, CBO has estimated the effect on direct spending of legislation
that would permanently prohibit Planned Parenthood from receiving federal funds. CBO
estimates that implementing such a bill would increase direct spending by $130 million
over the 2016-2025 period. The difference in the estimated costs reflects the different time
periods over which use of federal funds would be prohibited.
Under both policies the effects of the legislation on federal spending are highly uncertain
and would depend largely on the extent to which individuals who otherwise would obtain
Medicaid-funded services from Planned Parenthood would either:
Continue to obtain services from Planned Parenthood without Medicaid
reimbursement;
Obtain services from other health clinics and medical practitioners that receive
Medicaid reimbursement; or,
No longer obtain such services.
Honorable Kevin McCarthy
Page 2
Estimated Cost to the Federal Government of Permanently Prohibiting Federal
Funding for Planned Parenthood
The estimated budgetary impact of permanently prohibiting federal funding for Planned
Parenthood is shown in in the following table. For this estimate, CBO assumed that such
legislation will be enacted near the end of calendar year 2015.
By Fiscal Year, in Millions of Dollars
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
2016-
2020
2016-
2025
CHANGES IN DIRECT SPENDING
Estimated Budget Authority -235 10 65 50 40 40 40 40 40 40 -70 130
Estimated Outlays -235 10 65 50 40 40 40 40 40 40 -70 130
Based on information from a variety of government and private sources, CBO estimates
that Planned Parenthood receives approximately $450 million annually in federal funds. Of
that amount, roughly $390 million is provided through the Medicaid program and less than
$1 million is provided through the Children’s Health Insurance Program and the Medicare
program combined. The remaining amount, approximately $60 million, is provided
through the National Family Planning Program, which operates under Title X of the Public
Health Service Act (commonly referred to as Title X). Funding for that latter program is
subject to appropriation.
Direct Spending
The budgetary effects of a bill that would permanently prohibit federal funding from being
made available to Planned Parenthood depend mostly on whether Planned Parenthood
would continue providing services without Medicaid reimbursement and if so for how
many years it would continue to do so. CBO estimates that federal funds accounted for
about one-third of Planned Parenthood’s total revenues in 2013. The extent to which
federal funding would be replaced by nonfederal resources under a permanent prohibition
is highly uncertain. The amount replaced and the length of time such funds would be used
to provide services would depend on actions taken by Planned Parenthood and by others,
including state and local governments.
If none of the federal funds were replaced, CBO expects that some of the Medicaid
beneficiaries who would obtain services from Planned Parenthood under current law
would not obtain services at all, leading to lower Medicaid spending. Other people would
Honorable Kevin McCarthy
Page 3
continue to receive services—from providers that are eligible for Medicaid reimbursement.
For those people, CBO estimates that there would be little change in Medicaid spending.
If almost all federal funds were replaced, over the 2016-2025 period, CBO expects that
most Medicaid beneficiaries currently served by Planned Parenthood would continue to
obtain services from Planned Parenthood, but at no cost to Medicaid. Under that
circumstance, there would be little change in the services provided by Planned Parenthood
and a large reduction in Medicaid spending for those services.
CBO has no clear basis for assessing the extent to which Planned Parenthood would be able
to replace Medicaid funding. Therefore, for this estimate, CBO assumed that in the first
year in which federal funds would be not be available to Planned Parenthood,
approximately half of the federal funds Planned Parenthood would otherwise receive from
Medicaid would be replaced, the center of a wide range of possible outcomes. CBO
expects that any amount of funds replaced by Planned Parenthood would decline over time
and eventually most beneficiaries would instead receive services from other providers that
receive Medicaid reimbursement. The combination of those effects would reduce direct
spending by $235 million in 2016 and by $520 million over the 2016-2025 period, CBO
estimates. Those savings would be offset by increased spending for other Medicaid
services as discussed below.
To the extent that there would be reductions in access to care under such legislation, they
would affect services that help women avert pregnancies. The people most likely to
experience reduced access to care would probably reside in areas without access to other
health care clinics or medical practitioners who serve low-income populations. However,
how many Medicaid beneficiaries served by Planned Parenthood live in such areas is
uncertain. On the basis of an analysis of Essential Community Providers that offer family
planning services compiled by the Health Resources and Services Administration, CBO
estimates that as little as 5 percent or as much as 25 percent of the estimated 2.6 million
clients served by Planned Parenthood would face reduced access to care. For this estimate
CBO projects that 15 percent of those people would lose access to care in the first year
following enactment of the bill, the center of the distribution of possible outcomes. CBO
also expects access to care for those individuals would improve as other health care
providers expanded or newly offered services, but the timing of that improvement is also
uncertain. By 2020, CBO estimates that that only about 2 percent of the clients served by
Planned Parenthood would continue to face reduced access to care.
The government would incur some costs for Medicaid beneficiaries currently served by
Planned Parenthood who would not receive services that help women avert pregnancies if a
bill that permanently prohibits federal funding from being made available to Planned
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Parenthood were enacted. Because the costs of about 45 percent of all births are paid for by
the Medicaid program, CBO estimates that additional births that would result from
enacting such a bill would add to federal spending for Medicaid. In addition, some of those
children would themselves qualify for Medicaid and possibly for other federal programs.
In the first few years in which federal funds for Planned Parenthood would be prohibited
under the bill, CBO estimates the number of births in the Medicaid program would increase
by several thousand per year. CBO expects that the number of additional births would
decline over time as beneficiaries found other health care providers from which to receive
family planning services. Nevertheless, the bill would increase the number of births in each
year over the 2016-2025 period. CBO estimates, in total, the bill would increase direct
spending for Medicaid by $20 million in 2016, by $130 million in 2017, and by
$650 million over the 2016-2025 period. Most of the increased spending for the
pregnancies that occur in 2016 will take place in 2017.
Netting those costs against the savings estimated above, CBO estimates that implementing
the bill would increase direct spending by $130 million over the 2016-2025 period.
Spending Subject to Appropriation
In 2013, Planned Parenthood received approximately $60 million under Title X. Services
funded by Title X include contraceptive education and counseling; pregnancy diagnosis
and counseling; cervical and breast cancer screening; and education, testing, and referral
services associated with sexually transmitted diseases. CBO estimates that the bill would
not affect spending subject to appropriations because any discretionary grants, such as
those made under Title X, that might otherwise have gone to Planned Parenthood would be
awarded to other health clinics or medical practitioners.
I hope this information is helpful to you.
Sincerely,
Keith Hall
Director
cc: Honorable Nancy Pelosi
Democratic Leader
