The CBO NOW says that they’ve managed to come up with PROJECTIONS that show Obamacare will be even CHEAPER for the Federal government in terms of paying for consumer healthcare insurance coverage only costs for 2016-2025.
SINCE JANUARY, the CBO has crunched some numbers and decided that the government costs of Obamacare (only what they spend on consumers, not what they spend in connection with Obamacare for federal jobs, et cetera) for the years 2016 to 2025 will be 11 percent LOWER than they projected in January! (Pub. 49973, page 19).
The CBO March 2015 Publication 49973 identifies TWO REASONS: FIRST, “Downward revision in the projection of health insurance premiums that led to a lower estimate of the costs of subsidizing health insurance through the exchanges, and…”
SECOND “…a slightly lower estimate of the number of people who will gain insurance coverage because of the ACA,” Pub. 49973, page 19).
OK, so the government outlays for premium assistance are lower because insurance company premiums have not gone up as much as anticipated AND because of lower enrollment than projected.
Lower growth in premiums, that’s an Obamacare win, right? NO. First of all premiums aren’t LOWER, they’re INCREASING more slowly than anticipated. That’s a big difference. So why are increases in premiums occurring more slowly especially since we KNOW that healthcare PRICES for services are up?
The long and short of it is that the CBO doesn’t know: “PROJECTIONS OF SPENDING BY PRIVATE HEALTH INSURERS ARE HIGHLY UNCERTAIN, ESPECIALLY BECAUSE THE CAUSES OF THE PRONOUNCED SLOWDOWN IN SPENDING IN THE PAST SEVERAL YEARS ARE NOT WELL UNDERSTOOD,” (Pub. 49973, Page 21).
Not only doesn’t the CBO know the reason for the slowdown but it acknowledges that the slowdown happened PRIOR to Obamacare exchanges by several years: “Spending by private health insurers on health care and administration rose less in 2013…and by much less than the agencies had expected for 2013,” (page 19). The trend the CBO observes didn’t begin in 2013, but as the CBO says, “relatively slow growth that had begun some years earlier,” (Pub. 49973, page 19.)
We have an idea of why premiums are going up slower and if Obamacare was working, there should have been a premium DROP since the trend of insurance companies lowering premiums by raising deductibles, copayments and coinsurance payments, the out-of-pocket costs paid by consumers have increased drastically over the past several years in combination oftentimes with less overall coverage of needed medical services (as compared to the checkup).
You would think premiums would be going DOWN as our share of out-of-pocket increases, but no, taking away coverage and making consumers pay more has only SLOWED the INCREASE in premiums charged.
The CBO confirms what we know when it talks about an anticipated 8.5 percent INCREASE in premiums for Obamacare plans in the years 2016 to 2018 as the government finds “…many plans will not be able to sustain such low provider payment rates or such narrow networks over the next few years, placing upward pressure on exchange premiums,” (Pub. 49973, page 21).
So, having to provide sufficient provider choice and an inability to function as a group health plan (another Obamacare myth) with the superior negotiating rights of such plans based on the promise of customers, will lead to a spike in Obamacare plan premium prices.
The SECOND reason the CBO says the government will save money on health insurance coverage (payments on behalf of consumers rather than other expenses for new staff, et cetera in the Federal government), is that FEWER PEOPLE DIDN’T HAVE HEALTH INSURANCE THAN WE WERE TOLD. The whole justification for this miserable shift-law called Obamacare turns out wasn’t quite what we were told.
The CBO says the costs of insurance coverage only provisions for 2016 to 2025 will be lower because “…somewhat fewer people are now projected to gain insurance coverage because of the ACA, because CBO and JCT estimate that fewer people would be uninsured in the absence of the ACA…” (Pub. 49973 page 22).
Using this REVISION DOWNWARD OF HOW MANY PEOPLE WERE UNINSURED TO BEGIN WITH, the CBO says that since there were fewer people uninsured BEFORE the ACA than we were led to believe, ENROLLMENT of NEW people via exchanges or Medicaid will also be lower than projected.
This sudden lowering of the INCREASE in Medicaid spending specifically discussed in January by the CBO: “Medicaid and CHIP under the ACA over the 2015–2024 period will be $851 billion, $59 billion (7 percent) more than the April 2014 projection. Roughly half of the upward revision reflects an increase in the estimated share of people enrolling in Medicaid under the ACA who will be newly eligible…Federal costs per Medicaid enrollee are much higher for those who are newly eligible…because the federal government pays a larger share of the costs for the newly eligible…” (CBO, 1/15/15, page 13) is ALSO LOWERED BECAUSE: "That change is mostly the result of a downward revision to the estimated number of people gaining Medicaid coverage because of the ACA,” Pub. 49973, page 23.
