Obamacare mandate delay costs $12 billion, cuts insurance coverage

July 30, 2013
(Photo by Jessica Rinaldi/Reuters)
(Photo by Jessica Rinaldi/Reuters)

Obamacare's price tag has just gone up by $12 billion, due to the White House's decision to delay the employer mandate until 2015. The vast majority of that increase ($10 billion) reflects a reduction in the penalties that the government would have collected from employers who did not comply with the requirement to provide health insurance.

The Congressional Budget Office, which released the new estimate Tuesday, also expects more Americans to access federal subsidies purchasing coverage on the new marketplaces. Here's the key paragraph from their report:

The largest change is a $10 billion reduction in penalty payments by employers that would have been collected in 2015. (Penalties assessed for 2014 would have been collected in 2015.) Costs for exchange subsidies are expected to increase by $3 billion. Other small changes, including an increase in taxable compensation resulting from fewer people enrolling in employment-based coverage, will offset those increases by about $1 billion, CBO and JCT estimate.

The CBO also expects that, largely due to the delayed employer mandate, 1 million fewer people will have employer-sponsored coverage in 2014 than previously forecast.

"Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured and the others will obtain coverage through the exchanges or will enroll in Medicaid or the Children’s Health Insurance Program (CHIP), CBO and JCT estimate," CBO concludes. "In particular, fewer than half a million additional people are expected to be uninsured in 2014 than the number projected in the May baseline."

You can read the full report here.

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Dylan Matthews · July 30, 2013