WASHINGTON | Tue., Mar. 13, 2012 11:40pm EDT (Reuters) - The estimated net costs of expanding health care coverage under President Barack Obama's landmark restructuring have been reduced by $48 billion through 2021, though fewer people would be covered under private insurance plans, a new analysis from the nonpartisan Congressional Budget Office showed this week.
The CBO also revised its overall federal budget deficit estimates to show a $92 billion increase in the projected fiscal gap for 2012, confirming a fourth straight year of $1 trillion-plus deficits.
The CBO revisions gave ammunition to both Democrats, who largely support Obama's controversial 2010 health care law, and to Republicans, who staunchly oppose it. The law will take center stage later this month when the U.S. Supreme Court hears oral arguments in a challenge of its constitutionality.
By reducing the estimated net 2012-2021 costs to $1.083 trillion from $1.131 trillion a year ago, the CBO report could help Democrats blunt some of the criticism over the high costs of extending coverage to some 47 million uninsured Americans, as they try to tout savings elsewhere in the law.
These cost reductions are largely due to lower estimates for subsidies and tax credits associated with the law's planned insurance exchanges for individual coverage.
They also include higher revenues from penalties and the tax effects of higher taxable income, as private employers drop health insurance plans in favor of extra compensation for employees to buy insurance via the exchanges.
But the analysis also projected that some 4 million fewer people will obtain insurance through employers or through the insurance exchanges promoted by the health care law by 2016 than estimated a year ago.
Many of those people will need to be covered by government-run Medicaid program for the poor, causing higher Medicaid costs to eat into savings elsewhere.
The CBO also added another year to its overall cost estimate for the insurance provisions, extending it out to 2022, for an 11-year net cost of $1.252 billion.
Before the revenue and tax effects, the gross cost for that period hits a new high: $1.762 trillion, and Republicans wasted little time in pouncing on it and the lower coverage estimate.
"The fact that the outlook for the new law continues to worsen so rapidly, even before it's implemented, is ominous," said Senator Jeff Sessions, the top Republican on the Senate Budget Committee.
Many of the health care law's coverage provisions do not go into effect until 2014.
(Reporting By David Lawder; Editing by Will Dunham and Paul Simao)
© 2011 Thomson Reuters. Click for Restrictions.
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