The Congressional Budget Office (CBO) has updated its analysis of the Affordable Care Act in the aftermath of the Supreme Court’s decision upholding the constitutionality of the individual mandate, but ruling that the federal government cannot withhold federal funds from states that refuse to expand their Medicaid programs.
Since some states are refusing to open their Medicaid programs to their residents, the CBO concluded that costs to the federal government would drop by $84 billion over 11 years and 6 million fewer people will be covered by Medicaid and the Children’s Health Insurance Program. Half of that population will find insurance in the state-based health insurance exchanges, while the remaining 3 million will likely remain uninsured:
– Federal spending during that period for Medicaid and CHIP is now projected to be $289 billion less than previously expected
– Estimated costs of tax credits and other subsidies for the purchase of health insurance through the exchanges (and related spending) have risen by $210 billion.
– The reductions in spending from lower Medicaid enrollment are expected to more than offset the increase in costs from greater participation in the exchanges.
– The number of additional people entering the exchanges as a result of the ruling is projected to be only about half the number who will not be obtaining Medicaid coverage, many of whom will be ineligible to participate in the exchanges.
– Two-thirds of the people previously estimated to become eligible for Medicaid as a result of the ACA will have income too low to qualify for exchange subsidies, and roughly one-third will have income high enough to be eligible for exchange subsidies.
– For the average person who does not enroll in Medicaid as a result of the Court’s decision and enrolls in an exchange instead, estimated federal spending will rise by roughly $3,000 in 2022—the difference between estimated additional exchange subsidies of about $9,000 and estimated Medicaid savings of roughly $6,000.
Below is a comparison of previous CBO estimates:
|March 2010||– $138B over 2010–2019||-32M in 2019||+16M in 2019||+24M in 2019|
|March 2011||- $210B over 2012–2021||- 34M in 2021||+17M in 2021||+24M in 2021|
|March 2012||- $210B over 2012–2021||-33M in 2021||+17M in 2021||+23M in 2021|
|July 2012||-$109B over 2012–2022||-30M in 2021||+11M in 2021||+25M in 2021|