The Cost of Obamacare is Costing Less than Expected
The Congressional Budget Office indicates that the health
insurance costs under the Affordable Care Act are less than they were
previously estimated.
The
Congressional Budget Office, CBO, is a non-partisan government organization
that provides estimates for congressional use and consideration. At the inception of the Affordable Care Act
in March 2010, the CBO estimated that insurance related costs from 2015 to 2019
(i.e. the last 5 years of the 10 years estimating period) would amount to $710
billion. This March, the CBO revised
that estimate to $506 billion, a 29% reduction.
Most of this reduction comes from insurance subsidies provided by the federal
government. In 2010, the CBO estimated
that by year 2015, insurance subsidies would average $5200 per person. The CBO’s new estimate is $3960 per person in
2015. The CBO now estimates that the
total insurance subsidies over the next decade will be $849 billion. This is $209 billion less (20% less) that the
CBO’s previous 10 year estimate made in January 2015.
In
addition, the CBO estimates that the 10 year costs of the “Expanded Medicaid”
program for the poor is $847 billion, down from $920 billion of the previous
estimate, an 8% decline.
This is
good news for all of us. What all these
statistics mean is that health care insurance costs are being reduced by the
Affordable Care Act. The costs are lower
because the insurance premiums are lower.
This means that individuals and businesses pay less for health care
insurance than they did before. As the
White House press secretary, Josh Earnest, said “the Affordable Care Act is
contributing in a very positive way to holding down the growth of health care
costs.” It also means that since the
subsidies are less, the government has to spend less money to support the
Affordable Care Act. This means that the
Affordable Care Act is really helping to roll back the deficit. In fact the CBO estimates that the deficit
over the next 10 years will decline from an estimate of $7.6 trillion to $7.2
trillion, a $400 billion decline.
Agree with it or not, the Affordable Care Act is
working.
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