Budgetary Effects of Policies That Would Increase Hepatitis C Treatment

In this report, the Congressional Budget Office describes its initial analysis of the potential federal budgetary effects of policies that would increase treatment of hepatitis C, a liver disease that, left untreated, can lead to serious liver problems. CBO’s analysis focused on two sample national policies that would increase treatment rates among Medicaid enrollees and thereby affect federal spending on health care. CBO focused on the Medicaid population because people at high risk for hepatitis C (including injection drug users and people who have been involved with the criminal justice system) are likely to be Medicaid beneficiaries, either at the time of treatment or in the future.

Specifically, CBO analyzed two illustrative five-year programs in which treatment rates would peak at increases of 10 percent and 100 percent above the current treatment rate among Medicaid enrollees. In both scenarios, treatment rates would take two years to reach their peak (as outreach activities took place) and would stay at their peak level for three years. After the program ended, treatment rates would return to currently projected rates over a two-year period.

Those rates do not reflect CBO’s view of potential outcomes for any particular policy. Specific policies could result in higher or lower levels of treatment depending on the program put in place, the amount of investment in hepatitis C medications, and the extent of outreach to identify people who have the disease and connect them with treatment.

CBO found the following:

• Savings from health care costs that would be avoided by increased hepatitis C treatment would more than offset direct spending on that treatment. By CBO’s estimate, a 10 percent peak increase in the hepatitis C treatment rate among Medicaid enrollees during a five-year program would result in averted spending on treatment of complications from hepatitis C of about $0.7 billion over 10 years; spending on testing and treatment would increase by $0.5 billion over that period. With a 100 percent peak increase in the hepatitis C treatment rate, averted spending would total about $7 billion over 10 years, and spending on testing and treatment would total $4 billion over that period.
• Outreach would be necessary to substantially increase testing and treatment rates. CBO’s analysis does not include federal spending on outreach and implementation to identify people who have hepatitis C as well as to initiate the full treatment regimen and ensure adherence to it. A complete accounting of the federal costs of the illustrative policies would incorporate estimates of those costs. Whether the total federal costs of outreach, testing, and treatment would be fully offset by savings from averted health care spending would depend on the specific program put in place and the number and characteristics (such as insurance coverage) of people who are newly treated.
• Because hepatitis C progresses slowly, budgetary effects beyond the 10-year period typically used for CBO’s analyses are especially relevant. In future work, CBO will assess the short- and longer-term effects of policies to treat hepatitis C—as well as the effects of associated improvements in health and longevity—on spending for federal programs such as Medicare and Social Security (both disability and retirement benefits) to the extent that the evidence supports such effects.

CBO has not estimated the federal budgetary effects of any particular policy aimed at increasing hepatitis C treatment rates. The direction and size of those effects would depend on factors such as the number of people who have newly begun treatment with direct-acting antiviral (DAA) medications, their insurance coverage, the amount of federal spending to cover the costs of DAA treatment, spending on and success of outreach efforts and mechanisms put in place to ensure adherence to treatment, and the magnitude and timing of savings from health care costs avoided by increased hepatitis C treatment.