Budget Office lowers estimates of health care costs
- Article by: ANNIE LOWREY
- New York Times
- April 14, 2014 - 9:55 PM
WASHINGTON – The insurance expansion under the Affordable Care Act will cost $1.383 trillion during the next decade, more than $100 billion less than previous forecasts, the Congressional Budget Office said Monday.
The nonpartisan budget office’s report, an update to projections from February, shows the law costing less than in previous estimates in part because of the broad and persistent slowdown in the growth of health care costs. The news might come as welcome to Democrats on Capitol Hill and in the White House who are defending the law in an election year.
The reduced estimate is attributable mostly to the budget office’s cutting its projections of federal spending for subsidies for insurance premiums, with estimates falling by $3 billion for spending in 2014 and $164 billion during 10 years.
The budget office also issued projections that 12 million more nonelderly people would have insurance in 2014 than would have otherwise, rising to 26 million in 2017. The budget office, making projections along with the Joint Committee on Taxation, said the number of uninsured people would drop from 42 million in 2014 to 30 million in 2017.
The budget office and tax committee estimate that “the insurance coverage provision of the ACA will increase the proportion of the nonelderly population with insurance from roughly 80 percent in the absence of the health care law to about 84 percent in 2014 and to about 89 percent in 2016 and beyond,” the report said.
In addition, the CBO trimmed its estimates of the penalties that individuals would pay for failing to purchase coverage and that businesses would pay for refusing to cover their employees. It estimates that individuals will make $46 billion in payments over a decade, and employers $139 billion. Despite the significant costs of the insurance expansion, the budget office said that overall the Affordable Care Act should reduce deficits.
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