Feb 5, 2013 No Comments ›› Chuck Biscuits
Excerpted from Health Watch: The Congressional Budget Office (CBO) estimated Tuesday that President Obama’s signature healthcare law will cost about $1.3 trillion over the next 10 years.
The figure represents a slight increase since August, when the nonpartisan budget office estimated that the law would cost about $1.17 trillion before 2022.
Tuesday’s total incorporated 2023, and budget analysts wrote that last August’s estimate “remains essentially unchanged.”
The CBO has concluded that healthcare reform, in spite of its price tag, will ultimately reduce the deficit because of revenue-raisers within the bill.
A House GOP bill to repeal the law would raise the deficit by $109 billion over about 10 years, the CBO said in 2012.
The CBO’s long-term economic forecast revised a raft of predictions related to the cost and insurance outcomes of the Affordable Care Act.
Report authors projected that 26 million people will enroll in the law’s insurance exchanges by 2022 — 500,000 more people than the August report estimated.
The CBO also raised its projection for the number of people who will enroll in Medicaid by 1 million, for a total of 12 million new beneficiaries by 2022.
Implementation of the healthcare law has continued steadily since last August, contributing new variables to CBO projections.
Budget analysts cited several developments, including federal health officials’ decision not to allow states to partially expand their Medicaid programs, in adjusting their predictions.
The CBO said that the deal on the so-called “fiscal cliff,” which lowered tax rates for many, will lower employer-based healthcare coverage and increase enrollment in the state insurance exchanges.
The rate reduction “reduces the tax benefits associated with health insurance provided by employers,” report authors explained, predicting that 7 million people will lose employer-based health coverage as a result of the healthcare law.
The CBO questioned the “readiness” of the state insurance exchanges and the “ability of state Medicaid programs to absorb new beneficiaries” — making plain concerns raised by healthcare experts about the challenges of implementation before 2014.
Overall, the report said more employers will pay penalties for failing to offer health coverage than was previously expected, for a total of $13 billion in additional revenue.
Penalties from disobeying the individual mandate, however, will be $11 billion that was forecast last August, the CBO said.
“On the basis of revised income projections, more people who remain uninsured are expected to either be exempt from the penalty or to pay a smaller penalty based on a flat rate instead of one based on a percentage of income,” the report stated.