CBO: Court ruling cuts cost of health-care law, but leaves 3 million more uninsured

President Obama’s signature health-care initiative will cost a bit less than expected as a result of last month’s Supreme Court ruling, but the decision is also likely to leave millions more people without access to insurance, congressional budget analysts said Tuesday.

In its June 28 ruling, the court upheld the bulk of the Affordable Care Act but struck down a plan to require states to expand their Medicaid programs to cover residents who earn as much as 138 percent of the federal poverty level.

As a result, analysts at the nonpartisan Congressional Budget Office expect that some states will refuse to expand their Medicaid programs or will delay expansion until after 2014, when most other provisions of the law are scheduled to take effect.

In those states, people who earn between 100 percent and 138 percent of the poverty level will have the option to receive government subsidies to help them buy private insurance on new exchanges. But those who earn less than the full poverty level could be left out, the CBO said.

By 2022, the CBO forecasts, the court’s decision will reduce state Medicaid and child health-care rolls by about 6 million people, while increasing enrollment in the insurance exchanges by about 3 million. The number of people without any health insurance, meanwhile, would rise by about 3 million, the agency said, bringing the total number of uninsured to about 30 million.

The upshot for the federal budget would be positive, the CBO said. Federal spending on subsidies for people in the exchanges would increase by about $210 billion over the next decade. But federal spending on Medicaid and children’s health programs would decline by $289 billion.

Factoring in other minor changes, the cost of expanding coverage through 2022 would drop to $1.17 trillion, the agency said, compared with an original estimate of $1.25 trillion — a net reduction of $84 billion.

In a separate report released Tuesday, the CBO said the Affordable Care Act would retain its powers of deficit reduction, a critical goal of the legislation during a time of record budget deficits. A Republican plan to repeal the initiative — which includes hundreds of billions of dollars in tax increases as well as cuts to Medicare and other health programs — would increase deficits by $109 billion during the next decade.

Democrats immediately latched on to the latter finding, saying the report affirms the value of the law.

“The health reform legislation we passed in the Democratic-controlled 111th Congress is achieving the goals of expanding access to insurance coverage and controlling the growth of costs for Americans’ care,” House Minority Whip Steny H. Hoyer (Md.) said in a statement.

Republicans, however, noted that CBO estimates of the cost of the legislation continue to rise.

“CBO exposed the president’s partisan health law for what it is: a massive expansion of government paid for with over a trillion dollars in tax increases,” said Sen. Orrin G. Hatch (Utah), the senior Republican on the Senate Finance Committee. “It’s bad to its core and must be repealed.”

Lori Montgomery covers U.S. economic policy and the federal budget, focusing on efforts to tame the national debt.
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