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Cost of Obamacare

Postmillennialism —  Leave a comment

The Daily Beast — The Congressional Budget Office yesterday issued its first analysis of the Affordable Care Act since the Supreme Court’s ruling last month, which largely upheld the law. Amid the sound and fury of the individual mandate’s survival, many saw the court’s less-publicized decision—limiting the bill’s Medicaid expansion—as little more than a hiccup. But the report confirms that the call is going to have a big effect on cost and coverage.

The CBO now estimates that the altered bill will leave 3 million fewer people insured than before; that the decreased coverage will save the federal government $84 billion by 2022; and that repealing the ACA—which the House has voted to do in whole or in part time—would increase the deficit by $109 billion.

But behind these headline numbers, the CBO’s updated report is filled with uncertainty. Scholars differ on how much money, if any, the limit on Medicaid expansion will save—and even on the right methodology to figure it out. With the political climate surrounding state opt-outs shaky at best, the CBO’s projections are based on a lot of guesswork. Before quoting the numbers as gospel, it’s worth looking at several, potentially shaky assumptions at the report’s core.

In order to come up with its final figures, the CBO assumes that by 2022, one third of Americans who are newly eligible for Medicaid will live in states that actually approve the health-care law’s Medicaid expansion. It also assumes that one half will live in states that partially extend Medicaid coverage, and one sixth will live in states that turn it down.

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