The Congressional Budget Office (CBO) concludes the high court’s ruling leaving the health benefit exchange component and related mandates of the Patient Protection and Affordable Care Act intact but striking down the mandatory state expansion of Medicaid will lower the law’s implementation cost from 2012 to 2022. The reason, CBO concluded, is it will cost the Treasury less in income tax subsidies to help people purchase coverage through the exchanges than it would to add them to the Medicaid rolls:
With about 6 million fewer people being covered by Medicaid but only about 3 million more people receiving subsidies through the exchanges and about 3 million more people being uninsured, and because the average savings for each person who becomes uninsured are greater than the average additional costs for each person who receives exchange subsidies, the projected decrease in total federal spending on Medicaid is larger than the anticipated increase in total exchange subsidies.
Click here for the CBO’s summary and link to the updated budget projections.
Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email