Dive Brief:
- The Congressional Budget Office is predicting that the Affordable Care Act's insurance subsidies will cost a little less than previously thought, $1 trillion over the next 10 years instead of the almost $1.2 trillion originally expected.
- The CBO said the 8% cut results largely from tighter cost controls by insurance companies offering plans on the health care marketplace; Plans offered on the exchanges pay providers less and have tighter management of patients' treatment.
- While Medicaid adds almost $800 billion in costs over the decade, the health care law reduces the deficit through tax hikes, penalties paid by those who forgo insurance and curbs on Medicare.
Dive Insight:
There's a lot of pluses for the Obama administration in this report, which also found that the net cost of the Affordable Care Act coverage will be $104 billion less than expected over the next 10 years, hitting $1.4 trillion instead of more than $1.5 trillion. Now the question is whether the Affordable Care Act can be extended to help middle-class people who make too much to qualify for subsidies, yet don't make enough to pay for the plans and don't get insurance at work. It's likely to be some time before Congress addresses this issue, as the existing ACA program is complex enough.