Once again, the Congressional Budget Office (CBO) has lowered its projection for the cost of implementing the Affordable Care Act (ACA). In a new report, the CBO estimates the cost of health insurance subsidies, Medicaid and Children’s Health Insurance Program (CHIP) outlays and small-employer tax credits at $648 billion for 2015 to 2019. However, once the number is subtracted from the $142 billion in payments to the government due to the individual mandate, employer mandate, and Cadillac tax, the cost of ACA implementation over the same time period comes to $506 billion – a 30 percent drop from the CBO’s initial projection of $710 billion.
The report cites three key factors for the lower estimate:
- Private insurers selling policies in the state and federal insurance exchanges that are charging lower premiums than expected.
- A projected decrease of 2 million in the expected number of Medicaid and CHIP enrollees by 2025.
- The historic low rate of healthcare spending growth.
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