Fiscal Considerations for the Future of Telehealth

Though telehealth has the potential to reduce some health care expenditures, both the Congressional Budget Office (CBO) and the Government Accountability Office (GAO) project that increased use of telehealth will add to overall health care costs. Based on a recent CBO score of a five-month extension of pandemic authorities, permanent expansion could cost Medicare alone $25 billion over ten years, even without expanded use. As telehealth use grows, there is the potential for even greater costs in both federal health care programs and the private sector. With policymakers rapidly approaching a decision point on the direction of telehealth policy, it is important that they take time to fully understand the health and fiscal implications of adding telehealth services to our menu of care. Rather than make permanent decisions in the coming months, any extension of telehealth authorities should have proper guardrails, checkpoints to allow for data analysis and learning, and a way to align incentives for better and less expensive care. Much has been written on the merits and promises of telehealth. The purpose of this paper is to outline key health care costs and federal budget challenges that should be considered when developing long-term regulations surrounding telehealth.