Cost of Obamacare drops but millions to stay uninsured

Screenshot from healthcare.gov
The cost of the Affordable Care Act is turning out to be 20 percent cheaper than expected, but millions of Americans are projected to remain uninsured due to a number of issues associated with the law.

According to the Congressional Budget Office (CBO)’s latest projections on federal health spending, the US government will spend approximately $600 billion less than previously estimated between 2011-2020. Back in 2010, the agency predicted that total federal health spending would top $11 trillion. Additionally, CBO’s report stated that the ACA’s health insurance provisions will cost 20 percent less than first anticipated.

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Notably, the cost of federal health spending is going down even though the CBO’s initial estimate did not account for all the spending that would be done when the ACA went into effect, the Center on Budget Policy and Priorities reported. That means that the $600 billion drop is occurring after the agency tabulated the overall cost of the health care law.

There are multiple developments contributing to the drop in health spending, but the recession has played a large role, curtailing demand for health services. Medical inflation has also slowed, and payments made by Medicare have also been cut.

Despite this news, however, the CBO found that by 2025, 31 million residents in the United States will remain without health care coverage. This is due to a number of reasons, but 30 percent of these uninsured would not qualify for health coverage since they are expected to be undocumented immigrants.

Another 10 percent will not qualify for Medicaid because of a Supreme Court ruling that declared the ACA’s expansion of the program optional, leading some 21 states to opt out of the program and leave their citizens uninsured. Twenty-eight states have expanded Medicaid, plus the District of Columbia, and several states are still considering expansion.

READ MORE:Uninsured rate falls as GOP proposes costly Obamacare change

Since the Medicaid expansion was meant to cover people too poor to qualify for premium subsidies, those living in states that opted out of the program have few options available to them. The resulting “Medicaid gap” means millions of working Americans cannot get insurance.

Another problem for the ACA is that millions of Americans will simply choose not to get coverage. About 15-20 percent of the uninsured will be eligible for Medicaid but won’t apply, the CBO projects, while 40-45 percent will have access to health care via an employer or an marketplace but won’t apply for coverage, likely due to cost-related reasons.

According to the Center for Public Integrity, millions of people make too much to qualify for federal subsidies – meaning they have to bear the full cost of a premium’s pricing – but not enough to be penalized by the ACA’s individual mandate if they don’t purchase coverage. In this case, many Americans could simply decide not to bother.

On the bright side for the ACA, the number of uninsured Americans has dropped significantly and will continue to do so over the next decade, the CBO’s report estimates. About 42 million people were uninsured in 2014, the report stated – a number that would have been at 54 million without the health care law. By the end of 2015, the number of uninsured residents is expected to drop to 36 million.