When President Obama was selling his health care legislation to Congress, he declared that “the plan I’m proposing will cost around $900 billion over 10 years.” But with the law’s major provisions set to kick in next year, a new analysis by the Congressional Budget Office projects that the law will cost double that, or $1.8 trillion.
What accounts for the dramatic difference? It’s true that at the time of passage, the CBO said the gross cost of the law’s provisions to expand insurance coverage would be $940 billion over a decade. But as many critics of the health care law pointed out at the time, this number was deceptive because it estimated spending from 2010 through 2019 even though the program's major spending provisions weren’t scheduled to go into effect until 2014. Effectively, the original estimate measured the cost of six years of Obamacare instead of 10.
Now, as implementation approaches, CBO has released projections for the 2014 to 2023 budget window — the first actual decade of Obamacare — and the gross cost projection is $1.8 trillion.
CBO now expects the Medicaid expansion to cover an additional 13 million people by 2023 (up 1 million from its February estimate) and the new government-run insurance exchanges to cover 24 million (1 million fewer than previously projected).
CBO estimates that under Obamacare, 7 million fewer people in the United States will have employment-based insurance by 2023.
The CBO’s updated cost projections do not include an updated estimate of the effects of the law on the deficit. Previous CBO analyses have found that the law would reduce the deficit slightly, with curbs to the growth of Medicare spending and higher taxes more than offsetting the costs of expanding coverage.