Report projects health care costs to dip slightly

Published on NewsOK Modified: April 14, 2014 at 12:54 pm •  Published: April 14, 2014
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WASHINGTON (AP) — The Affordable Care Act's health insurance subsidies will cost a little less than previously thought, according to a new report released Monday.

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.

Medicaid adds almost $800 billion in costs over the decade. Overall, however, the health care law reduces the deficit because of tax hikes, penalties paid by people and businesses that forgo insurance, and curbs on Medicare.

Overall, the report is positive news for the White House and its Democratic allies on Capitol Hill, who are under assault politically after the health care law's troubled roll-out and as it remains unpopular with many voters. CBO's predictions of the number of people covered by the law haven't changed much and it is holding firm to predictions that 6 million will get coverage through health insurances exchanges this year. The White House has boasted that 7.5 million people have signed up, although some people will have coverage for only part of the year and not all of the enrollees have paid their premiums.

All told, combining a host of factors, CBO finds that the net cost of the Affordable Care Act's coverage provisions will be $104 billion less than previously thought over the next 10 years, tallying $1.4 trillion instead of more than $1.5 trillion. The factors are complex, but they include higher excise tax revenues from so-called Cadillac health plans and lower general tax revenues, because more people than expected receive tax-free compensation in the form of employer-sponsored health insurance.

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