Obamacare’s most expensive provisions will cost about $9 billion less than expected, according to the latest estimates from the Congressional Budget Office.
CBO said the law’s coverage provisions — a set of policies that includes the law’s insurance subsidies and Medicaid expansion — will cost the federal government about $1.5 trillion over the next decade.
The latest analysis doesn’t cover the whole law, and CBO reiterated that it expects the law to reduce the federal deficit. Tuesday’s analysis was confined to the law’s coverage provisions, and didn’t include Medicare savings or new taxes on drug and medical-device companies, which offset the costs of expanding coverage.
The $1.5 trillion spending estimate is about $9 billion lower than estimates from last year, due in part to CBO’s estimate that roughly 1 million fewer people will obtain health insurance on the exchanges and 1 million fewer people will sign up for Medicaid and the Children’s Health Insurance Plan, due to the rocky rollout of HealthCare.gov.
Among CBO’s other justifications for lowering the cost are that insurance companies priced exchange premiums lower than the agency had anticipated, and that the agency now expects to receive more from insurance companies than it will pay out in a program designed to protect insurers who get a particularly unhealthy—and expensive—mix of enrollees.
CBO estimates that 24-25 million Americans will get health insurance through the Affordable Care Act’s exchanges and 12-13 million Americans will gain Medicaid or CHIP coverage. But some Americans—roughly 6-7 million—will lose their employer sponsored coverage, according to the projections, as some employers and employees choose instead to seek health insurance on the exchanges.