Obamacare Cost Projection Drops $109 Billion

The Slatest
Your News Companion by Ben Mathis-Lilley
April 14 2014 2:46 PM

Congressional Budget Office Drops Obamacare Cost Projections by $109 Billion

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Pictured: CBO director Doug Elmendorf just analyzing the heck out of some budgets.

Photo by Mark Wilson/Getty Images

The Congressional Budget Office's latest projection says the Affordable Care Act is on track to cost $109 billion less than previously anticipated. (Other headlines on this story say $104 billion, but that's the number for the period from 2015 to 2024; the CBO report also revises projections for this year downward by $5 billion. If we've somehow misinterpreted this, please correct us via outraged tweets at @slatest.) From Jonathan Cohn at The New Republic:

Why this latest change? It doesn't appear to be because the law will reach fewer people. CBO now expects slightly more people to end up with health insurance, at least over the long run. The CBO's primary explanation for lower costs is that health insurance premiums on the new exchanges—what the administration calls “marketplaces”—are lower than CBO had originally expected they would be.
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There is one potential hangup for ACA boosters in the report, Cohn writes.

The plans on the marketplaces are cheaper because they limit beneficiaries to fewer doctors and hospitals, while controlling their access to treatments and medications. Insurers have used the techniques for a long time, going back at least to the 1980s. That’s “managed care.” But insurers appear to be using them much more aggressively in the new marketplace plans, on the theory that most people will pick policies based on price rather than access. The change has not gone over well with many people, particularly those whose old policies lacked such restrictions. And in at least a few cases, these restrictions are bound to create real hardship for people with serious medical problems who need access to particular medications or specialists.

Ben Mathis-Lilley edits the Slatest. Follow @Slatest on Twitter.

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