The Congressional Budget Office (CBO) has yet again decreased its estimate of uninsured individuals expected to gain coverage under the Patient Protection and Affordable Care Act (PPACA), per an updated report issued on May 14, 2013. In 2011, the CBO estimated that nearly 34 million uninsured individuals would gain coverage as a result of PPACA’s proposed expansion of Medicaid and other insurance market reforms. As of May 2013, that estimate has decreased to 25 million, due in part to the Supreme Court’s decision that states could not be forced to expand Medicaid, and other new rules limiting subsidy eligibility for related individuals and exempting certain individuals from the Individual Mandate if coverage exceeds a certain percentage of the individual’s household income.
In the report, the CBO also estimated that the net cost of implementing PPACA’s coverage and insurance mandates through 2023 has increased by approximately $40 billion as a result of a decrease in estimated excise tax revenue form employers and decreased Individual Mandate revenues from individuals.
If enrollment for the Health Insurance Marketplaces begins on October 1, 2013 as anticipated, the market will get a glimpse into the accuracy of these estimates. Some stakeholders believe the current estimates are still too high, given the cost of potential Individual Mandate tax penalties in comparison with annual premium costs. It make take a few years for consumers to feel comfortable with the new framework for purchasing health insurance. Additionally, it will also take time for the Individual Mandate penalties to increase to the level where it makes financial sense for individuals, particularly young and healthy individuals, to purchase coverage instead of paying a tax penalty.
For more information on the CBO report, see the actual report linked above, as well as these stories from Reuters, Bloomberg News, and The Hill.
