The Congressional Budget Office on Tuesday quietly raised the 10-year cost of ObamaCare's insurance subsidies offered via the health law's exchanges by $233 billion, according to a Congressional Budget Office review of its latest spending forecast.
The CBO's new baseline estimate shows that ObamaCare subsidies offered through the insurance exchanges — which are supposed to be up and running by next January — will total more than $1 trillion through 2022, up from $814 billion over those same years in its budget forecast made a year ago. That's an increase of nearly 29%.
The CBO upped the 10-year subsidy cost by $32 billion since just last August.
In part, this jump is because more people will get insurance via the exchanges than it had forecast. Where the CBO had seen 22 million enrolled in an exchange in 2022, it now figures 25 million will be.
That explains only part of the cost hike. The rest is largely the result of the CBO's sharp increase in what it expects the average subsidy will be.
Average Subsidy Rising
Last year, the CBO said the average exchange subsidy for those getting federal help when ObamaCare goes into effect next year would be $4,780. Its latest estimate raised that to $5,510 — a 15% increase. All these numbers are up even more from the CBO's original forecast made in 2010, which had the first-year subsidy average at $3,970.
The CBO also expects 7 million workers will lose their employer coverage due to ObamaCare, almost twice as many as it had previously said would be dumped. It expects tax penalties on individuals and companies who don't buy insurance to be $36 billion higher from 2014 to 2019 than it originally forecast.
On the other hand, the budget office has lowered the program's Medicaid costs, in part because of the Supreme Court's decision letting states opt out of that part of ObamaCare. As a result, the CBO didn't change its overall ObamaCare spending much.
Still, if those other savings fail to materialize, ObamaCare's overall cost could end up far higher than promised. That could prove another blow to the beleaguered health care law, which has seen most states reject setting up the insurance exchanges amid mounting worries that they won't be running in time, concerns about premium spikes, and fears that millions of families could be left without any affordable health care coverage.
So Much For 'Cheap' Plans
A report out this week by the American Action Forum concluded that ObamaCare could nearly triple the cost of a relatively bare-bones insurance policy for younger workers. Should that occur, it would raise costs to those not eligible for subsidies and further inflate the taxpayer cost of the insurance exchanges.
In addition, there's growing concern that a glitch in the law will leave millions of low-income families without access to affordable health care. Under the law, the only people eligible for subsidies in the exchanges are those who don't have access to affordable insurance at work.
The law measures affordability based on the cost of covering just the worker, not his or her family. So those who can't afford to cover their families at work couldn't get subsidized coverage through the exchanges, either. "This is a very significant problem, and we have urged that it be fixed," Ron Pollack, executive director of Families USA, told the AP recently.