CBO: Health Care law more costly than previously estimated
by Pinedale Online!
March 18, 2012
The Congressional Budget Office provides non-partisan analysis of the impacts of legislation for the U.S. Congress. In March, they released their updated information on estimated projected costs and reductions to the federal budget due to insurance coverage provisions of the Affordable Care Act (ACA), the health care mandate for U.S. citizens and required health care coverage of employees by businesses. The new revisions incorporate the legislation comprising the Patient Protection and Affordable Care Act (Public Law 111-148) and the health care provisions of the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152).
Here are some of the highlights of the report:
- The gross cost of insurance coverage to the federal government will be $1,762 billion, compared to the $940 billion forecast when it was signed into law.
- Even with the new law, 26-27 million residents (nonelderly) are expected to be uninsured in 2016 and subsequent years.
- The share of legal, residents (nonelderly) with insurance is projected to rise from 82% in 2012 to 93 % by 2022.
- The unemployment rate is expected to be higher than it was in the 2011 forecast and wages and salaries will be lower than when previously analyzed, which will yield an increase in the projected number of people eligible and using taxpayer-funded insurance programs through Medicaid and Children’s Health Insurance Program (CHIP) as a result of the new Affordable Care Act law. 20-23 million people are projected to go on the taxpayer-funded rolls to receive coverage through the new insurance exchanges and 16-17 million people will be enrolled in Medicaid and Children’s Health Insurance Program (CHIP).
- Fewer employees are expected to receive health insurance coverage through an employer-provided health care insurance program or insurance exchanges. Fewer businesses are expected to provide employee health care job benefits. CBO projects 3-5 million fewer employees receiving employer provided health benefits than projected in March 2011. The CBO report does not give a reason why employers are expected to drop their coverage of employees.
- Private health insurance premiums per enrollee in the United States grew by 8.5% and 9.6% annually between 2000 and 2005 and by 4.4% and 5.3% annually between 2005 and 2010. The CBO projects private health insurance premiums per enrollee will increase by 5.7% per year, on average, between 2012 and 2022.
- Government tax-payer funded spending for Medicaid resulting from the coverage provisions of the Affordable Health Care law for the 2012-2012 period is expected to be $160 billion more than estimated last year. Spending for Children’s Health Insurance Program (CHIP) will be $8 billion more. CBC expects higher projected enrollment in those Medicaid and CHIP, especially for 2014 and 2015, with an increase in the projected taxpayer funded federal share of costs for people enrolled in programs under the new health care law.
- The Affordable Care Act includes a provision that requires large employers to automatically enroll their employees in health insurance, expected to be implemented in 2015 (rather than 2014).
- The CBO expects an increase in the number of people who will not receive employment-based health coverage. As a result, the government will see an increase in revenues due to employers being required to pay penalties for not providing health care insurance to their employees.
- The government also expects the number of people who remain uninsured to be higher than estimated in March 2011. As a result, the CBO notes an increase in the amount in expected federal revenues from individuals who will have to pay the government a penalty for not having health insurance.
Click on this link for the report: http://cbo.gov/sites/default/files/cbofiles/attachments/03-13-Coverage%20Estimates.pdf Updated Estimates For The Insurance Coverage Provisions Of The Affordable Care Act – March 2012 Congressional Budget Office report