Affordable Care Act Subsidy Cost Estimate Lowered

January 26, 2015

Obamacare will cost 7 percent less than expected over the next decade for federal subsidies to help lower-income people pay for private health insurance, congressional researchers said on Monday.

A report by the nonpartisan Congressional Budget Office (CBO) said insurance coverage would cost $964 billion from 2015 to 2024, $68 billion below its April 2014 projection, due to factors including lower than expected enrollment in federal and state insurance exchanges set up under the Affordable Care Act.

Most of those subsidies, which help pay for insurance premiums and out-of-pocket costs, could be in jeopardy from a U.S. Supreme Court case that seeks to prevent funds from going to consumers in 36 states who obtain coverage through the federal exchange. A ruling is expected by the end of June.

CBO expects 12 million people to enroll in private coverage this year and 21 million in 2016, vs. an earlier forecast of 13 million and 24 million, respectively.

CBO also expects private enrollment to fluctuate between 24 million and 25 million people each year beginning in 2017, fewer than the previous forecast that called for enrollment to stay steady at 25 million.

Even with slower enrollment in private insurance, CBO said higher-than-expected enrollment in the Medicaid program for the poor would help Obamacare reduce the number of uninsured Americans by 19 million this year and by 24 million to 27 million people each year from 2016 onwards.

Medicaid would cost the federal government $59 billion more than expected over the next 10 years as a result of higher enrollment under Obamacare, CBO said.

(Reporting by David Morgan; Editing by Jonathan Oatis)

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