The new report 
from the non-partisan Congressional Budget Office (CBO) found that the coverage expansion under the Affordable Care Act has a lower price tag than what the CBO projected in February, to the tune of $104 billion over the ten-year period 2015–2024. For 2014, the cost is now projected to be $5 billion less than what was projected in February. 

This is good news — and keep in mind these are the gross costs of expanding coverage. The CBO points out that “many other provisions, on net, are projected to reduce budget deficits.” Based on the most recent comprehensive estimates, “the ACA’s overall effect would be to reduce federal deficits.”


The updated lower price tag comes despite the fact that the CBO projects an increase in the number of people getting insurance through the new marketplaces created by the law, up to 25 million from 24 million in the last projection. The difference is that premiums on the marketplaces came in lower than predicted, so the federal government has less to pay out to help folks who qualify for income-based subsidies purchase insurance on the marketplaces. The CBO projects that trend — premiums lower than initial projections — to continue in future years. 

The CBO has kept its projection that 6 million people will gain insurance through the marketplaces in 2014, though 7.5 million people have signed up. The difference is that the CBO projects some people who have coverage now won’t necessarily keep it all year, for example because they get a job that offers insurance. Some also may never pay their first month’s premium and never get covered even though they signed up. People will move on to the marketplace throughout the year too, for example if they lose a job that offered insurance. The CBO projects that the net effect will be about 6 million people covered by the marketplaces at any given time. 


Here’s the big picture on coverage gains, counting not just the marketplaces but Medicaid expansion and other features of the law that impact coverage (yes, this includes plan cancellations that happened because of the ACA’s requirements): 

12 million more nonelderly people will have health insurance in 2014 than would have had it in the absence of the ACA. … 19 million more people will be insured in 2015, 25 million more will be insured in 2016, and 26 million more will be insured each year from 2017 through 2024 than would have been the case without the ACA. 

In short, the latest estimates from the CBO suggest that Obamacare will put a major dent in the uninsurance rate in this country, and will do so at a lower cost than previously projected. Projections like these should always be treated with caution, but the early returns indicate that the “TRAIN WRECK!!!” predictions were wrong.