CBO Lowers Projected Cost of PPACA Insurance Benefits

The Congressional Budget Office has revised the projections it released in February, lowering the estimated cost of Patient Protection and Affordable Care Act health insurance benefits by 15 percent.

moneyCompared with the CBO's February estimates, the new projections reduce the estimated spending for PPACA health insurance subsidies and related spending by $186 billion from 2015 to 2024. That decrease mainly results from a $165 billion decrease in premium cost projections for health insurance exchange plans, based on additional CBO analysis of PPACA health plan premiums and characteristics. Subsidies or tax credits to help cover the cost of exchange plan premiums are available to people making between 100 percent and 400 percent of the federal poverty level.

Additionally, the CBO has reduced its estimate for spending related to PPACA health insurance benefits by $21 billion. Because of lower-than-expected premiums, projected spending is lower for the PPACA risk adjustment program — which redistributes funds from health plans with lower-risk enrollees to those with higher-risk enrollees to protect against adverse selection.

The CBO's February report had already lowered the projected cost of the PPACA insurance coverage provisions by $9 billion compared with May 2013 estimates, partly because of lower premium estimates. The February report also created a stir by predicting the PPACA would reduce the total number of hours worked by 1.5 percent to 2 percent from 2017 to 2024, primarily because workers will choose to supply less labor because of the new taxes and other incentives they face and the financial benefits for some workers.

More Articles on Healthcare Spending:
CBO Lowers Estimated Cost of PPACA Insurance Provisions By $9B
Does the New CBO Report Help or Hurt ObamaCare?  
CMS Data: 25% of Physicians Account for Most Medicare Spending 

 

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