New Report Says Obamacare Will Cost $104 Billion Less Than Expected
The cost of expanding health-care coverage under the Affordable Care Act will be $104 billion less than previously expected.
Time magazine reports that a new analysis from the non-partisan Congressional Budget Office predicts that the cost of the ACA, sometimes referred to as Obamacare, will cost the federal government less than it had predicted in its previous study, performed in February.
The reason for the downward revision, according to the CBO, is that health insurance premiums cost less on the new insurance “exchanges” than it was projected they would. The exchanges — what the Obama administration calls “marketplaces” — are open markets where people who do not have employer-based health-care plans can shop for insurance.
According to a story from The New Republic, it was previously thought that young, healthy people would have to pay more for health insurance in order to subsidize policies for older members of the population. It was also suspected that parts of the law that required policies to include essential benefits, like maternity coverage and mental health treatment, would drive up costs. To counteract those rising costs, the federal government agreed, under Obamacare, to pay out generous subsidies to make insurance affordable to people who couldn’t pay for it.
The recent report from the CBO, though, shows that premium costs aren’t going to rise as sharply as analysts had predicted. Since the exchanges appear to be keeping prices down, the federal government won’t have to pay out as much in subsidies.
“It is good news that premiums have come in lower than expected, meaning lower costs for the federal government and for families as well," said Larry Levitt of the Kaiser Family Foundation. ”It’s a sign that the ACA may be working to hold premiums down by forcing insurers to compete over price rather than by cherry-picking healthy people.”
This is the second piece of recent good news for Democrats who supported the controversial healthcare law. The Obama administration announced earlier this month that the goal of 7 million enrollees for private health insurance on the exchanges had been met by the March 31 deadline.
Obamacare promises to be a contentious issue in the midterm elections later this year. USA Today reported last week that a new poll showed it remains an important topic to those who oppose the law.
"If you think Obamacare is good, it's not a big issue for you. But if you think it's bad, it's an intense one,” said Sen. Jerry Moran, R-Kan.
Good news, like the CBO report, may help reduce the number of those who think the legislation was a mistake, and that would certainly be good for Democrats who overwhelmingly supported Obamacare.