A CBO report outlines good and bad results of Supreme Court action on care law.
WASHINGTON - President Obama's signature health care initiative will cost a bit less than expected as a result of last month's Supreme Court ruling, but the decision is also likely to leave several million more people without access to insurance, congressional budget analysts said Tuesday.
In its June 28 ruling, the court upheld the bulk of the Affordable Care Act but struck down a plan to require states to expand their Medicaid programs to cover residents who earn as much as 138 percent of the federal poverty level.
As a result, analysts at the nonpartisan Congressional Budget Office (CBO) expect that some states will refuse to expand their Medicaid programs or will delay expansion until after 2014, when most other provisions of the law are scheduled to take effect.
In those states, people who earn between 100 percent and 138 percent of the poverty level will have the option to receive government subsidies to help them buy private insurance on newly created exchanges. But those who earn less than the full poverty level could be left out, the CBO said.
By 2022, the CBO forecasts, the court's decision will reduce state Medicaid and child health care rolls by about 6 million people, while increasing enrollment in the insurance exchanges by about 3 million. The number of people without any health insurance would rise by about 3 million, the agency said, bringing the total number of uninsured to about 30 million.
The upshot for the federal budget would be positive, the CBO said. Federal spending on subsidies for people in the exchanges would increase by about $210 billion over the next decade. But federal spending on Medicaid and children's health programs would decline by $289 billion, the office found.
Factoring in other minor changes, the cost of expanding coverage through 2022 would drop to $1.17 trillion, the agency said, compared with an original estimate of $1.25 trillion -- a net reduction of about $84 billion.
In a separate report released Tuesday, the CBO said the Affordable Care Act also would retain its powers of deficit reduction, a critical goal of the legislation during a time of record budget deficits.
A Republican plan to repeal the initiative -- passed recently by the House -- would increase deficits by $109 billion during the next decade, the CBO found.
"Repealing the [health care law] will lead to an increase in budget deficits over the coming decade, though a smaller one than previously reported," budget office director Douglas Elmendorf said in a letter to House Speaker John Boehner, R-Ohio.
The latest estimate from the CBO establishes a new political and fiscal reality against which future health care proposals will be measured. It also provides grist for election-year debates in campaigns for the White House and Congress.
Democrats immediately latched on to the latter finding, saying the report affirms the value of the act.
"The health reform legislation we passed in the Democratic-controlled 111th Congress is achieving the goals of expanding access to insurance coverage and controlling the growth of costs for Americans' care," House Minority Whip Steny Hoyer of Maryland said in a statement.
However, Republicans assert that the true costs will be much higher than the initial estimates indicated. First, they note, the major costs -- from expanding Medicaid and providing subsidies for the purchase of private insurance -- will not show up until 2014. In addition, Republicans say, the projected savings in Medicare may be impossible to achieve because, under the law, Medicare payments to health care providers would fall further and further behind the providers' costs.
The new numbers are the latest of several updates issued by the budget office since March 2010.
The New York Times contributed to this report.