The total price tag for ObamaCare’s insurance programs will be 20 percent less than expected, the government’s budget office said Monday.
The law’s insurance provisions are now expected to cost $571 billion through 2019 — a drop of about $139 billion from the government's earliest estimates five years ago, according to new estimates by the Congressional Budget Office (CBO).
The drop in spending is largely due to the smaller-than-expected subsidies load because enrollment in health insurance through ObamaCare has been slower than expected.
The CBO had initially expected 13 million people to sign up for health insurance through the exchanges by the end of this year, though it since revised that figure to 12 million. The enrollment tally is still far higher than the Obama administration's new target of 9 million people this year.
"The agencies still expect enrollment to grow rapidly over the next two years in response to increased outreach by state health agencies and others and to increased awareness of the individual mandate; however, that growth is now anticipated to occur a little more gradually than it was previously," the report said.
The report also offers a glimpse at the long-term changes in the insurance industry likely to result from the Affordable Care Act over the next decade.
In all, the CBO predicts that 27 million people will gain coverage under the healthcare law over the next decade.
That includes as many as 16 million people gaining coverage through the government-run programs Medicaid and the Children’s Health Insurance Program (CHIP), as well as a loss of 10 million people with employer-based coverage.
The expansion in government-subsidized programs like Medicaid and CHIP is far greater than the government initially expected, and this has driven up costs.
By 2025, about 31 million people will remain uninsured, and the majority will be exempt from penalties under the law. About one-third of those who remain uninsured will be immigrants living in the U.S. illegally, the CBO predicted.
The White House hailed the CBO's new figures.
"The estimates released today by CBO once again confirm the progress we’ve made in bringing down deficits and expanding access to healthcare under the Affordable Care Act," said deputy press secretary Eric Schultz in a statement.
The costs of ObamaCare have continually decreased since the CBO first began estimating its cost five years ago. Its last estimate was published in April 2014.
Some of the lower costs are the result of a slowdown in healthcare expenses, which has been reported by private insurers as well as Medicare and Medicaid officials, the CBO wrote.
The law might also be cheaper because of the Supreme Court’s decision making it optional for states to expand Medicaid, a program adopted by about half of the states.
The CBO does predict more states will eventually sign onto the Medicaid program, which doles out federal dollars to cover more low-income people under the government-run program.
Seven state leaders are currently in talks with the federal government on Medicaid expansions, most of which were not factored into the report.
The report only included enrollment figures and administrative actions as of early December.
Subsidies made up the biggest chunk of ObamaCare spending, though its costs are less than expected compared to the rising expenses for Medicaid beneficiaries.
By 2015, the government will have spent $1.1 trillion on subsidies given to people on the new insurance exchanges or people newly enrolled in Medicaid.
The subsidies are expected to keep growing from an average of $5,000 per person in 2016 to $8,000 per person in 2025.
The report also cautioned that it is not able to calculate the total effect of ObamaCare “as a whole” because of the vast changes under the law.
“Determining what would have happened since the enactment of the ACA [Affordable Care Act] had the law not been in effect is becoming increasingly difficult,” the report states.
This story was updated at 7:55 p.m.