In its latest report, the Congressional Budget Office (CBO) revised Obamacare’s price tag, citing that the federal health law will cost less than originally estimated between 2015-2025 due to the following reasons:

  • Many states (including North Carolina) remain opposed to expanding Medicaid.
  • Data released by the Centers for Medicare and Medicaid Services (CMS) suggests that 2 million fewer people were uninsured before Obamacare than originally estimated – many of whom were receiving Medicaid benefits.

At this juncture, it is estimated that Obamacare will reduce the total number of uninsured by 24 million – 8 million fewer people than its original goal of 32 million.

Avik Roy, Senior Fellow at the Manhattan Institute, provides a more in-depth analysis of a slower growth in subsidized premium costs:

We’ve reported extensively in this space on how Obamacare has dramatically increased the cost of individually-purchased health insurance. The Manhattan Institute’s 2014 study found that in the average county, premiums increased 49 percent relative to the year before.

However, in 2010, the CBO estimated that average exchange-based premiums would increase by much more. That’s because the CBO guessed that Obamacare’s exchange costs would be similar to those in the pricey employer-sponsored market.

But the competitive, premium-support dynamic in the exchanges meant that premiums came in meaningfully lower than those in the employer-sponsored market, but meaningfully higher than those in the old individual market. 

As a result, the amount that the federal government has to subsidize Obamacare’s premiums is also lower: by 24 percent, or $1,240 per person, relative to what the CBO predicted in March 2010. This will reduce outlays, over a ten-year period, by hundreds of billions of dollars.