Health reform implementation

CBO: ObamaCare mandate delay will cost government $12 billion

The Obama administration’s decision to delay the employer mandate in its signature healthcare law will cost the government about $12 billion, according to the Congressional Budget Office (CBO).

The CBO on Tuesday released its first official estimate of the delay in the employer mandate, which requires large businesses to offer health insurance coverage to their full-time workers or pay a penalty.

The one-year delay increased the cost of the law’s coverage provisions by $12 billion over the next 10 years, the CBO said.

{mosads}Republicans have hammered the Obama administration over the delay, arguing that it creates a double standard because the law’s individual mandate still goes into effect next year.

The CBO said most of the cost increase — $10 billion — comes from lost revenue. The government will not collect penalties until 2015 from employers that do not provide health insurance.

The delay will also add $3 billion to the cost of tax credits for people who buy insurance through newly created insurance exchanges, the CBO said.

Roughly 1 million fewer people will have employer-based health insurance because of the delay, according to the CBO’s analysis.

About half of them will go uninsured, while the other half will turn to newly created insurance exchanges for people who don’t get coverage through their employer.

Although the delay in the employer mandate will make parts of the law more expensive, the CBO has said that taken as a whole, the law reduces the federal deficit.

“The Affordable Care Act is more than fully paid for. According to CBO estimates, the law in its entirety would reduce the deficit by more than $100 billion over the next decade and more than $1 trillion in the decade after that,” White House spokeswoman Jessica Santillo said.

Santillo also highlighted provisions of the law that have already taken effect.

“Furthermore, the Affordable Care Act is already helping to make coverage more affordable,” she said. “Over the twelve months ending in May 2013, health care costs saw the slowest rate of increase in nearly 50 years.”

— This post was updated Wednesday, July 31, at 10:30 a.m.

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