CBO: Supreme Court Decision Will Decrease Cost of ACA

Between decreased Medicaid enrollment and increased health insurance subsidies, the federal government will save $84 billion implementing the Affordable Care Act (ACA) through 2022, according to new estimates from the Congressional Budget Office (CBO).
by | July 25, 2012
 

Between decreased Medicaid enrollment and increased health insurance subsidies, the federal government will save $84 billion implementing the Affordable Care Act (ACA) through 2022 as a result of the Supreme Court's decision on the law, according to estimates from the Congressional Budget Office (CBO).

CBO projected that 6 million fewer people will be enrolled in Medicaid after the Supreme Court essentially made the law's Medicaid expansion (to 133 percent of the federal poverty level) optional. Of those, 3 million are expected to gain insurance through state health exchanges (and receive a federal subsidy to do so), and 3 million are estimated to go uninsured.

In total, CBO expects 11 million to be covered by Medicaid (down from initial estimates of 17 million), and 25 million will participate in the exchanges (up from 22 million) by 2022.

Because of those shifts, the federal government is expected to spend $289 billion less for the Medicaid expansion, but an additional $210 billion on tax subsidies for individuals and families that obtain insurance through the health exchanges. Another $5 billion in other minor adjustments to the CBO's projections led to the $84 billion in estimated savings.

The CBO estimates operated under a number of assumptions, based on the various questions that states will ask as they consider voluntarily expanding Medicaid. For example, some states might not implement the expansion right away, or might only do so partially.

The CBO assumed that one-third of potentially newly eligible people would live in states that fully implement the expansion. Another 50 percent were projected to live in states that partially expanded Medicaid, and the rest were estimated to live in states that did not expand Medicaid at all.

The full report is below.

 

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