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CBO: Health reform to cut deficit by $84 billion

by Brendon Nafziger , DOTmed News Associate Editor
The U.S. Supreme Court kept most of President Obama's health reform legislation intact when it delivered its landmark ruling on the controversial law in late June. But the country's highest court did leave the decision to expand Medicaid up to the states. As a result, some states are opting out of Medicaid expansion, and that means the Affordable Care Act will wind up costing tens of billions of dollars less than previously estimated, but it also means millions more people will remain uninsured, according to Congressional Budget Office projections released Tuesday.

According to CBO estimates, the ACA will reduce the federal deficit by about $84 billion more than previously thought, from 2012 through 2022. But as a result of changes in the law, by the end of the 11-year period, 6 million fewer people will be covered by Medicaid and the Children's Health Insurance Program. About half of these will still get insurance through the state-run exchanges, but 3 million will remain uninsured, the CBO said.

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Overall, the CBO said the government will spend about $289 billion less on Medicaid and CHIP than previously expected, while subsidies for insurance bought through the exchanges will go up about $210 billion. Another $5 billion will be saved through other minor tweaks, the non-partisan group estimated.

One factor driving the savings is that not everyone who would have qualified for Medicaid under the expansion will be eligible for subsidies on the exchanges, the CBO said.

As for repealing the law, as the GOP-controlled House of Representatives voted to do on July 11, that would raise the deficit by $109 billion, according to the CBO, mostly because spending cuts would be overshadowed by lost tax revenue and increased Medicare outlays.

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Ted Huss

math test?

July 26, 2012 11:57

If you serve less people, you spend less money. If the states don't all sign up to expand Medicaid like Fedzilla wants, then the cost is lower, no? If anyone believes any mega large scheme by the Federal (or State)
government will cost less, yet fulfill promises, please document any track record of that success. The people for whom the AFC will cost less are those in the 1200+ groups and individuals who have been exempted from it.

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