Dive Brief:
- The Congressional Budget Office on Monday significantly lowered its estimate of the cost of providing health insurance coverage to millions of Americans under the Affordable Care Act.
- Douglas W. Elmendorf, the director of the budget office, said the changes resulted from many factors, including a general "slowdown in the growth of healthcare costs" and lower projections of insurance premiums that are subsidized by the federal government.
- In March 2010, when the ACA legislation was signed, the Congressional Budget Office estimated that the expansion of coverage would cost the federal government $710 billion in the fiscal years 2015 through 2019. The newest projections indicate that those provisions will cost $571 billion over that same period, a reduction of 20%.
Dive Insight:
The lower-than-expected cost of subsidies is a timely and interesting finding, given that the future of certain subsidies—and arguably even the future of the ACA—hang in the balance as the Supreme Court prepares to hear a case later this year that challenges subsidies paid to low and moderate-income people in the states that did not establish their own exchanges.
Also, while the subsidies will cost the government less than originally expected, they are still substantial and may continue to draw criticism despite the projected savings. "Subsidies in the exchanges are projected to average about $5,000 per subsidized enrollee from 2016 through 2018 and to reach almost $8,000 in 2025," Elmendorf reported.
It remains to be seen whether the new estimates will do anything to improve the image of the ACA as it weathers ongoing criticism from the now Republican-controlled Congress.
In the meantime, a new report providing the latest data for enrollment-related activity in the individual market Marketplace appears to show signs of growth for 2015. 9.5 million consumers either selected or were automatically re-enrolled into qualified health plans between Nov. 15 and Jan. 17. According to HHS, "The number of 2015 Marketplace plan selections increased by 3.7 million between 12-15-14 and 1-16-15 (from 3.4 million to more than 7.1 million, including automatic re-enrollees)." 2.4 million acquired coverage through 14 state-based exchanges.