Skip to main content
  1. News
  2. Politics
  3. Government

CBO lowers cost estimates for Obamacare by $104 billion

See also

More good news for Obamacare came out today via the non-partisan Congressional Budget Office (CBO). The CBO released a report which shows that Obamacare, otherwise known as the Affordable Care Act, will costs $104 billion less than previously projected over the next ten years. If true, the CBO report shows that Obamacare will reduce the deficit by even more in the coming years. The news follows the Obama administration announcement last week that 7.5 million people are expected to enroll in a qualified health plan under the Affordable Care Act.

The CBO report is sure to draw some serious skepticism from critics who already doubted the Obama administration's announcements on enrollment numbers. The full CBO report can be read here.

As explained in the report, the main reason cost projections were revised downward for Obamacare is that the government is spending less than anticipated on the subsidies built into the law to help poorer individuals afford insurance. According to the CBO, "The plans being offered through the exchanges in 2014 appear to have, in general, lower payment rates for providers, narrower networks of providers, and tighter management of of their subscribers' use of the health care than employment-based plans do. Those features allow insurers that offer plans through the exchanges to charge lower premiums (although they also make plans somewhat less attractive to potential enrollees."

What does that mean in layman's terms?

Basically, the plans insurance companies offering plans are limiting the number of doctors that the plan purchasers can see for care, while tightly controlling the use of the plan benefits. Because they can control the amount that they pay out in benefits, the insurers are also charging lower premiums.

Obamacare critics may claim that the report shows that enrollees are not getting high quality insurance through the exchanges. Supporters may counter by claiming that the law is working as designed by reducing costs while simultaneously increasing the amount of people covered while simultaneously promoting better cost management.

Advertisement

News

  • Baseball Hall of Fame
    The Baseball Hall of Fame in Cooperstown welcomes six new inductees
    Video
    Video
  • 2012 do-over
    If we were to re-do the 2012 election, a new poll suggests Romney would win
    Politics
  • Boko Haram
    Boko Haram kidnaps the wife of the vice prime minister of Cameroon
    World News
  • Ceasefire breaks
    Israel's Benjamin Netanyahu claims Hamas broke another brief ceasefire
    Gaza
  • Close call with CME
    Scientists tell how Earth survived a giant solar flare back in 2012
    Space
  • Comic-Con
    What's going on at Comic-Con? Get all the latest updates here
    Comic-Con