CBO: Obamacare Coverage Estimates Shrink

February 7th, 2013
in econ_news, syndication

Econintersect:  Obamacare will cover at least 5 million less people that previously estimated, according to the latest report by the CBO (Congressional Budget Office).  About 27 million additional people will gain coverage through the PPACA (Patient Protection and Affordable Care Act of 2010) in the latest estimate, down from 32 million in 2010 and 34 million a year ago.  In what may seem a contradiction without further explanation, the CBO has raised the estimated number of Americans who will receive healthcare coverage through insurance exchanges from 24 million to 26 million.

Click on map for larger image.


Follow up:

The map above was produced by the Kaiser Foundation and covers data for 2010-2011.

So how is it that coverage estimates for those insured under insurance exchanges will increase but the overall coverage will decrease compared to earlier estimates?  The new estimates now have 8 million less covered by employer sponsored insurance.  (Previous estimate - March 2012 - had been 3-5 million less.)

Finally, the increase in the number of those added to Medicaid roles is now thought to be 11 million, down from 16-17 million estimated in March 2011.

Thus the number of people not gaining coverage from PPACA is 5-7 million less than originally estimated and the number gaining access to Medicaid is lower by 5-6 million.  The two numbers are essentially a match.

The failure of Obamacare to meet original estimates represents a political victory for Republican governors who have rejected implementation of the extended Medicaid provisions of PPACA.  This was made an option by the Supreme Court decision in June 2012 which upheld all aspects of the law except for the requirement that extended Medicaid be implemented for states to continue to receive the previous levels of Medicaid support.

The insurance exchanges will presumably not be effected by the Republican governors' actions because the default for any state not implementing an exchange is to be included in the national exchange sponsored by the federal government.

The 25 states that are planning to reject the extended Medicaid coverage (10), leaning toward rejection (6) and undecided (9) are shown on the map below.  All have Republican governors except for undecided West Virginia.

Click on graphic for interactive map with further information at The Advisory Board.


Of the 25 states in red and gray, 16 are in the in the two highest uninsured categories shown on the earlier map.  And 7 of the 12 states in the highest uninsured category are dark red above.  It is clear that the choices are not being made on the basis that medical insurance coverage for their citizens does not need improvement.  Based on statements widely made the positions are taken based on ideological belief rather than economic data.

What can possibly develop from this divergence in policy is a nation divided into a more healthy group of states and a less healthy group, when health conditions are averaged over all economic levels of the population.

The extended medicare program is 100% paid for by the Federal government for 3 years and 90% thereafter.  What is the saying about noses and spite for the face?

In a related note: The CBO has reported that Medicare spending growth continued to slow in 2012, rising by 3%.  The projections for the cost over the next 10 years were lowered by $137 billion.  The estimates for increased Medicaid costs over the next 10 years were lower by $236 billion.  The latter figure is undoubtedly influenced by the fact that there will be 5-6 million less people in some states who will not be eligible for Medicaid compared to what was previously assumed.

John Lounsbury


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