The Congressional Budget Office (CBO) recently published updated cost estimates associated with the Affordable Care Act (ACA) through 2024. These latest estimates come in at more than $100 billion less than previous estimates from February. In total, the health insurance provisions of the law – including subsidies for purchasing private coverage on the exchanges and the costs associated with Medicaid expansion – are estimated to cost a total $1.8 trillion between 2015 and 2024, which is about 7 percent less than previously estimated. The source of the reduced costs is largely attributable to lower premiums. These lower premiums are driven by exchange plans’ anticipated lower provider payment rates, narrow provider networks, and more tightly managed care.
Additionally, the latest CBO report estimates that an average of 6 million Americans will be enrolled in exchange plans over the course of 2014. At any given point in time, the total number of people enrolled in exchange plans may exceed this estimate, but CBO explains that some individuals may come in and out of exchange coverage due to changes employment status, other qualifying events, or even a failure to pay premiums. CBO further estimates that 7 million more people will be covered by Medicaid in 2014 than would have been in the absence of the ACA.
While the numbers are looking good for the administration all around, the coming months and years will reveal whether patients and ACA proponents can stomach the insurer tactics driving these cost-savings or ultimately conclude that it impedes access to care — a topic we explored in our recent post on What’s Next for Obamacare.