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CBO lowers cost estimates for Obamacare by $104 billion

As this graph illustrates, the CBO recently lowered its estimated cost projections for Obamacare.
As this graph illustrates, the CBO recently lowered its estimated cost projections for Obamacare.
Congressional Budget Office

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.