The Supreme Court’s decision on the Affordable Care Act, while keeping healthcare reform intact, may have cut the measure’s deficit spending potential nearly in half.
The non-partisan (yet frequently contested) Congressional Budget Office released today an updated estimate of the costs associated with the ACA, taking into account new provisions for Medicaid expansion given the Supreme Court’s recent rulings.
The nation’s highest court ruled last month that the ACA was a constitutional measure, but blocked a provision that would have required that states expand Medicaid coverage in order to continue receiving federal Medicaid funding.
The CBO’s latest estimates find that healthcare reform will increase federal deficit spending by $109 billion over the next 10 years, $101 billion less than with the Medicaid expansion rule intact.
The office estimated that the reform measure overall will cost $1.168 trillion from 2012-2022, ramping up from $3 billion in costs in 2012 to $159 billion in 2022. That’s still a break from the $1.252 trillion the CBO predicted in March.
Most of the difference stems from assumptions the CBO made about participation in Medicaid versus participation in state health insurance exchanges, which were also created through the ACA.
Since the Supreme Court ruled that the federal government could not force states to expand Medicaid programs under penalty of exclusion from funding, the new CBO rule assumes that some states will opt out.
Since the federal government would have shelled out extra dollars to support those programs, states who choose not to participate are, in a sense, saving federal dollars. However, patients who might have gained coverage through Medicaid expansion will instead have to turn to the state exchanges, which costs more per patient, Forbes reported.