The large
subsidies for health insurance that helped fuel the successful drive to sign up
some 8 million Americans for coverage under the Affordable Care Act may push
the cost of the law considerably above current projections, a new federal
report indicates.
Nearly nine in
10 Americans who bought health coverage on the federal government’s healthcare
marketplaces received government assistance to offset their premiums.
June 18, 10:30 a.m.: Because
of an error in calculations, this article incorrectly stated that a new federal
report indicates that the cost of insurance subsidies under President Obama’s
healthcare law may be running above current projections. The figures in the
report actually suggest that the cost of the subsidies is roughly in line with
current projections from the Congressional Budget Office.
That assistance
helped lower premiums for consumers who bought health coverage on the federal
marketplaces by 76% on average, according to the new report from the Department
of Health and Human Services.
Premiums that
normally would have cost $346 a month on average instead cost consumers just
$82, with the federal government picking up the balance of the bill.
While the
generous subsidies helped consumers, they also risk inflating the new health
law’s price tag in its first year.
The report
suggests that the federal government is on track to spend at least $11 billion
on subsidies for consumers who bought health plans on marketplaces run by the
federal government, even accounting for the fact that many consumers signed up
for coverage in late March and will only receive subsidies for part of the
year.
That total does
not count the additional cost of providing coverage to millions of additional
consumers who bought coverage in states that ran their own marketplaces,
including California, Connecticut, Maryland and New York. About a third of the
8 million people who signed up for coverage this year used a state-run
marketplace.
Federal
officials said subsidy data for these consumers were not available.
If these state
consumers received roughly comparable government assistance for their insurance
premiums, the total cost of subsidies could top $16.5 billion this year.
That would be
far higher than projections this spring from the nonpartisan Congressional
Budget Office that the 2014 subsidies would cost the federal government $10
billion. Instead, the number would be more in line with earlier estimates from
the budget office, which had been revised downward when analysts believed fewer
people would sign up for coverage. In the end, enrollment exceeded
expectations.
The state-based
marketplaces - a centerpiece of the Affordable Care Act - enable Americans who
do not get health coverage at work to select among plans that offer at least a
basic set of benefits. The plans cannot turn away sick people.
Consumers who
make less than four times the federal poverty level, or about $94,000 for a
family of four, qualify for subsidies to offset the cost of their premiums in
most places.
Obama
administration officials Tuesday focused on the availability of affordable
coverage for millions more consumers.
“What we’re
finding is the marketplace is working. Consumers have more choices, and they’re
paying less for their premiums,” Health and Human Services Secretary Sylvia
Burwell said in a statement.
But officials
who worked on the report refused to speak on the record or discuss the
potential impact of the subsidies on the long-term cost of the health law.
Although the
law’s costs have thus far been lower than projected, some experts question
whether the subsidies will be sustainable.
The
Congressional Budget Office estimated in April that the annual cost of
subsidies will rise to $23 billion next year and $95 billion in 2024, although
the budget office continued to project that all the law’s costs will be offset
by additional revenue it raises and by cuts in other federal healthcare
spending.
Source:
http://www.latimes.com/nation/politics/la-na-obamacare-subsidies-20140617-story.html Copyright © 2014, Los Angeles Times
Herman
Talmadge III posted in New Georgia Republican Leadership for Principles above
Politicians
Comment
Federal subsidies always increase the base
cost of any product or service to unsustainable levels due to politics,
bureaucracy and regulations that diminish the value of the product or
service. Third party funding of
healthcare is a “black hole”. The costs
of education, healthcare and government are unsustainable.
Norb Leahy, Dunwoody GA Tea Party Leader
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