KHN Morning Briefing

Summaries of health policy coverage from major news organizations

CBO Projects Health Law Subsidies Will Cost Less Than Previously Expected

The new CBO projections find that the health law's expansion of health coverage will, from 2015–2024, cost $104 billion less than previously projected.

The CBO report is available as a downloadable PDF file.

Wall Street Journal: CBO Projects Lower Premiums in Health-Insurance Exchanges
Health-insurance premiums for plans sold in the Affordable Care Act's exchanges will be lower than previously expected for the next few years, according to a report by the Congressional Budget Office released Monday. The nonpartisan congressional scorekeeper also found that in 2017, 25 million people will buy insurance plans through the exchanges, or one million more than it forecast in February, and that number will remain steady through 2024 (Radnofsky, 4/14).

Associated Press: Report Projects Health Care Costs To Dip Slightly
The Congressional Budget Office predicts that health insurance subsidies under the so-called “Obamacare” plan will total a little more than $1 trillion over the next 10 years, instead of almost $1.2 trillion initially estimated. CBO said the 8 percent cut results largely from tighter cost controls by insurance companies offering plans on health care exchanges. Generally speaking, the plans offered on the exchanges pay health care providers less and have tighter management of patients’ treatment options, and that means lower premiums and taxpayer subsidies (4/14).

USA Today: CBO Lowers Estimate Of Health Care Law Costs
Net costs in 2014 are due almost entirely to subsidies paid out to those who make less than 400% of the federal poverty level who enrolled in the health insurance exchanges, as well as the Medicaid expansion in some states (Kennedy, 4/14).

Marketwatch: CBO Cuts Obamacare Cost Views And Says Program Reduces Deficits
CBO officials stressed in this report that while it takes into account $456 billion in offsetting tax collections resulting from Obamacare’s implementation, there are other revenue-producing aspects of the program it did not include in this report. CBO says it estimated in July 2012 that, overall, Obamacare would reduce deficits (Britt, 4/14).

Washington Post Wonkblog: Lower Premiums (Yes, Really) Drive Down Obamacare’s Expected Eosts, CBO Says
The CBO report points out that it previously thought Obamacare's exchange plans would look more like employer-based coverage, but that hasn't turned out to be the case so far -- hence, the cheaper premiums. "The plans being offered through the exchanges this year appear to have, in general, lower payment rates for providers, narrower networks of providers, and tighter management of their subscribers’ use of health care than employment-based plans," CBO wrote (Millman, 4/14).

Vox: Obamacare's Price Tag Just Got Cut By $104 Billion
The White House has announced that 7.5 million people signed up for coverage on the exchange this year, but the CBO still isn't changing its prediction that 6 million people will have insurance through the marketplace in 2014. What explains the discrepancy? Mostly the expectation that not everyone buying coverage right now will keep it all year. Some of the 7.5 million people, for example, will likely get jobs and transition into employer-sponsored plan (something that becomes especially likely as the economy adds jobs). With some of this churn on and off the exchange the CBO thinks that, at any given time, about 6 million people will have a plan they bought on the exchange (Kliff, 4/14).

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