Nearly five years since President Obama signed the Affordable Care Act into law, a nonpartisan report announced Monday that the projected costs are continuing to fall.
In the latest forecast by the Congressional Budget Office, provisions of the health care law will cost 11% less, or $142 billion in savings over the next 10 years, than what the agency originally projected in January. Additionally, the law will cost 29% less for the 2015-2019 time frame than the CBO’s initial forecast when the law was signed in March 2010.
The CBO cites two reasons for the decline in costs: reductions in both private health insurance premiums and the number of Americans expected to sign up for Medicaid and subsidized insurance under the law’s marketplaces. Before the law took effect, the agency predicted more people than anticipated had private coverage and fewer companies than anticipated were canceling coverage.
“The slower growth has been sufficiently broad and persistent,” said the congressional agency.
By 2025, the CBO estimates “the total number of people who will be uninsured… is now expected to be smaller than previously projected,” and three million fewer people are expected to sign up for the Affordable Care Act.
Over the last few years, the costs have continued to drop. In March 2010, the CBO first predicted the law would cost $710 billion from 2015 to 2019. But Monday’s projection announced that the law is now expected to cost $506 billion. The agency also updated its projection on the number of people who will be without health insurance by 2025 from 27 million to around 25 million. The report also shows lower enrollment than originally expected in federal and state exchanges set up by Obamacare. According to the Obama administration, 11.4 million people have signed up for private insurance through the exchanges so far in 2015. These estimates have been announced less than a week after the Supreme Court heard a case challenging a major provision of the law regarding federal subsidies for states that refused to open their own state-run exchanges. While the law continues to get attacked by Republicans and the possibility of another narrow ruling that could undermine the health care program, this new CBO assessment today provides the Obama administration with some positive news. The court is expected to release a decision in late June on King v. Burwell.
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