The Congressional Budget Office (CBO), the non-partisan referees of Congress, came out with a new cost estimate of the health reform legislation. The Affordable Care Act also known as Obamacare has been contentious because of the cost of the legislation, and the control given to the federal bureaucracy to craft critical details. Whether or not the United States can afford to take on such an expensive piece of legislation remains up for debate. Proponents of the ACA believe the coverage provisions and changes to the healthcare delivery system will save money in the long run. The CBO agrees at the moment, and estimated on July 23, 2012 approximately $84 Billion over the next decade will be saved.
This score contrasts with the previous one released in March showing a projected cost at nearly twice the original estimate. The bottom line for now is the cost for the insurance reforms have gone down. Many states have already decided to decline the Medicaid expansion. The Supreme Court ruled states could opt out of the Medicaid expansion, and not lose federal funding. The legislation provides federal support for states on 100% of the costs of new Medicaid beneficiaries. This support slowly fades down to 90% by the end of the decade.
The Supreme Court decision makes the health insurance exchanges integral in providing private insurance coverage options. Many people who were expected to be covered by Medicaid will now be covered by health insurance exchanges. The key, however, is the cost of the subsidies and whether or not small to mid-sized employers decide to drop coverage and decide to pay the penalty. This could shift the cost the other direction, making the bill more expensive because more individuals earning subsidies will be a higher collective cost for all of us. Expect regular CBO estimates on this issue, and the true cost will not be known until the thing is fully implemented ten years from now.
See below for the summary ,and check back to this site and for more premium content on this subject my weekly radio program America’s Healthcare Challenge by clicking here.
Click here to view new cost estimate from CBO on the Affordable Care Act.