Reform Law Expected To Cost Less, Insure Fewer People Than Projected

Insurance coverage provisions in the federal health reform law will cost less over the next decade but will provide coverage for fewer U.S. residents than previously estimated, according to a Congressional Budget Office report released Tuesday, The Hill's "Healthwatch" reports (Pecquet, "Healthwatch," The Hill, 3/13).

The law's insurance coverage provisions will have a net cost of $1.08 trillion between 2012 and 2022, down by about $50 billion from last year's estimate. The report attributed the updated projection to new legislation, as well as to changes in the economic outlook and technical calculations (Zigmond, Modern Healthcare, 3/13).

The revised figures show that about two million fewer U.S. residents than previously projected will gain coverage by 2016 ("Healthwatch," The Hill, 3/13). Last year, CBO estimated that the number of uninsured U.S. residents would fall by at least 32 million, but the latest report shows the number will fall by between 30 million and 33 million.

CBO also now projects that more U.S. residents will gain coverage through Medicaid, the Children's Health Insurance Program or non-group arrangements and that fewer will gain coverage through employers or state health insurance exchanges (Ethridge, CQ Today, 3/13).

According to CBO, about 20 million U.S. residents will receive coverage through exchanges, down from its projection last year of 22 million.

In addition, Medicaid enrollment will increase because the Obama administration provided several options to states to shift current Medicaid populations into the exchanges, CBO said. "The proposed rule appears to offer states a greater opportunity to ... increase the number of enrollees who will qualify for higher matching payments from the federal government," the report states (McCarthy, National Journal, 3/13).

CBO Issues New Deficit Projections

Legislation (HR 3630) that extends the payroll tax cut, continues unemployment benefits and delays scheduled cuts to Medicare physician reimbursement rates is almost entirely behind CBO increasing its estimate of the federal budget deficit for fiscal year 2012 by $93 billion, CQ Today reports.

CBO's latest estimate projects a shortfall of $1.17 trillion during this fiscal year, up from CBO's January estimate of $1.079 trillion (Krawzak, CQ Today, 3/13).

CBO's latest projection is based on the same economic assumptions as the January figure and is still bound by current law, which assumes that regularly extended tax cuts will expire and trigger sequestrations at the end of the year (O'Donnell, National Journal, 3/13).