Magazine article Medical Economics

Affordable Care Act Will Cost Billions Less Than Predicted

Magazine article Medical Economics

Affordable Care Act Will Cost Billions Less Than Predicted

Article excerpt

Provisions of the Affordable Care Act (ACA) will cost $142 billion less- or 11%-over the 2016-2025 period than originally estimated by the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT).

ACCORDING TO revisions released in March from the CBO, the reduction is based on two primary factors: a slower growth of private health insurance premiums; and differing sources and numbers of people gaining insurance through the ACA.

In January, the original estimated cost of the ACA was expected to be more than $7.6 trillion from 2016 to 2025. New estimates place that number at $7.2 trillion.

Factors that led to lower overall budget projections stemming from the number and type of health insurance gained under the ACA include:

I A lower estimate of the total number of people with employment-based coverage;

I An increase in the estimate of workers employed by businesses with 1,000 or more employees;

I A decrease in the estimate of the number of people who had no health insurance at all; and

I Higher Medicaid enrollment before 2014 than previously estimated.

The CBO and the Joint Committee on Taxation (JCT) lowered their estimates of private health insurance premiums for the 2016 - 2025 period based on new information on national health expenditures.

"Spending by private health insurers on health care and administration rose less in 2013 (the most recent year for which data was available) than in preceding years and by much less than the agencies had expected for 2013"concluded the CBO and JCT, the result of the continuing trend of "relatively" slow growth in healthcare spending. …

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