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Congressional Score-Keeper Updates Reform Law Estimates; New Savings of $89 Billion Associated with Supreme Court Ruling

Tuesday, July 24, 2012

In the wake of the U.S. Supreme Court ruling on the Patient Protection and Affordable Care Act (PPACA), the Congressional Budget Office (CBO) issued a report indicating that net federal spending under the reform law will decrease by $89 billion over an 11-year period from 2012-2022. The new savings are the result of CBO's estimates that fewer individuals will be enrolled in Medicaid and more individuals will receive their health coverage through exchanges.

CBO revised their cost estimates because the Court struck the PPACA provision that required states to expand eligibility for Medicaid to cover individuals up to 138 percent of the federal poverty level.  States failing to expand eligibility had risked losing all their federal Medicaid funding.  With the Supreme Court's ruling removing the risk of losing non-ACA Medicaid funds, CBO stated that they now anticipate some states will not expand their Medicaid eligibility at all and that others will wait until after the law takes effect in 2014 to determine how much of increase in eligibility they will pursue. CBO does not specify which states will pursue what options. 

Ultimately, CBO estimates that there will be 6 million fewer people on Medicaid rolls as a result of the ruling.  CBO initially expects 2 million more people in newly formed state exchanges and 4 million more people to go uninsured. Over the next decade, this means the spending on subsidies for people in exchanges would increase by about $210 billion but spending on Medicaid would decline by $289 billion, resulting in net savings.

In a separate report, CBO estimated it would cost $109 billion over the 2013-2022 time frame if the full repeal of PPACA contained in H.R. 6079, "the Repeal of Obamcare Act," were enacted into law.   

Read the report regarding updated projected savings.
Read the report regarding updated projected repeal costs.

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