News Feature | April 18, 2014

CBO Report: Obamacare Will Cost Less Than Predicted

Christine Kern

By Christine Kern, contributing writer

CBO: Obamacare Will Cost Less Than Expected

Latest estimates for costs of ACA suggest lower price tag than expected for 2014

The CBO has released its latest estimates for the costs of the ACA for 2014 with some good news for supporters of Obamacare. The report states, “Relative to their previous projections made in February 2014, CBO and JCT now estimate that the ACA’s coverage provisions will result in lower net costs to the federal government: The agencies currently project a net cost of $36 billion for 2014, $5 billion less than the previous projection for the year; and $1,383 billion for the 2015–2024 period, $104 billion less than the previous projections.”

These updated estimates of the Affordable Care Act's impact on both the budget and the health insurance industry demonstrate that the president's signature health care law is actually growing cheaper to implement, costing the government $5 billion less in 2014 than was previously projected, according to The Huffington Post. The law also is projected to cover more individuals than previously believed, owing, in part, to some broader workforce trends.

However, a significant portion of the population will remain uninsured even with the law fully implemented. Furthermore, the costs to individuals and employers, although lower than earlier estimates, still are a source for criticism among opponents of the law.

Some highlights of the report include:

  • Twelve million more non-elderly people will have health insurance in 2014 than if Obamacare had not become law. CBO's projections on this crucial measure of the law's success are higher than recent surveys from the Rand Corp., which estimated a 9.3 million reduction, and from Gallup, which shows a 3.5 million decline.
  • For all of 2014, the CBO expects 6 million people to be covered by private health insurance policies purchased through the exchanges, fewer than the 7.5 million enrollment figure touted by the White House, due to anticipating cycling in and out of different types of coverage over the year.
  • The number of uninsured in 2014 will be 42 million people, according to the CBO. It will fall to 36 million in 2015 and 30 million in 2016 and 2017. Most of them will remain uninsured because they will have declined coverage, the CBO said.
  • Medicaid and the Children's Health Insurance Program will grow by 7 million more beneficiaries in 2014 than if Obamacare weren't law, the CBO said. The CBO projects that 11 million more people will sign up for Medicaid in 2015, and 12 million to 13 million per year between 2016 and 2024
  • The cost of the health care law is falling, according to the CBO. Between 2015 and 2024, the price tag of Obamacare will be $1.383 trillion, $104 billion lower than prior estimates, due to a combination of factors.
  • Another factor is new projections of price increases for health insurance sold on the exchanges in future years. Exchange enrollment is projected to jump to 13 million in 2015, and new customers are expected to be relatively healthier than those who enrolled this year, so premiums will rise an average of $100 next year, then grow at 6 percent each year through 2014.