CBO: Obamacare Costs to Increase in 2016 As Millions More Get Subsidized Insurance
(CNSNews.com ) - - Taxpayers will have to shell out an estimated $18 billion more to subsidize Obamacare in 2016 despite lower than expected enrollment in the health care exchanges, according to a forecast by the non-partisan Congressional Budget Office [1] (CBO).
In its latest 10-year economic forecast, CBO predicted that 13 million Americans would purchase health insurance through the Obamacare exchanges in 2016, with 11 million of them receiving government subsidies to help pay for their premiums.
But that figure is 40 percent [2] lower than the 21 million [3] enrollees CBO predicted last year would sign up.
Despite fewer than expected enrollees, the cost of running the exchanges will increase $18 billion, according to the CBO’s Budget and Economic Outlook: 2016 to 2026. [4]
Four days before the third Obamacare open enrollment period ended on Sunday, 8.9 million people had signed up for, or had their health insurance automatically renewed through, the HealthCare.gov website, according [5] to the latest figures available from the Centers for Medicare and Medicaid Services (CMS).
As of January 23, “about 8.9 million consumers have signed-up for health coverage through the HealthCare.gov platform or had their coverage automatically renewed,” CMS reported on January 27, four days before the end of the 2016 open enrollment period [6], which ran between Nov. 1, 2015 and Jan. 31, 2016.
A CMS spokesperson told CNSNews.com on Tuesday that the total number of Obamacare enrollees for 2016 was not yet available. “We plan to release final enrollment numbers soon.”
As of Jan. 23, Florida reported the highest number of Obamacare plan selections (1.6 million) – defined as “those who have submitted an application and selected a plan” – during the open enrollment period. The lowest number (13,194) was reported in President Obama’s home state of Hawaii.
“Plan selections include those consumers who are automatically re-enrolled into their current plan or another plan with similar benefits, which occurs at the end of December,” CMS stated. “Weekly net new plan selections take into account new plan selections minus any consumer or insurer-initiated cancelations for new plan selections.”
“CBO and the staff of the Joint Committee on Taxation (JCT) estimate that about 11 million people will receive exchange subsidies, on average, during calendar year 2016, compared with an average of 8 million in 2015,” page 69 of the CBO report stated.
“Additionally, the agencies project that about 2 million other people will purchase coverage through an exchange but will not be eligible for subsidies—for a total of 13 million people, on average, enrolled in policies purchased through exchanges.”
In October, a report [7] by the U.S. Dept. of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation also came up with a “bottom up” estimate of “9.4 to 11.4 million effectuated enrollees in the Marketplace at the end of 2016,” based on “previous enrollment periods and analysis of the broader insurance market.”
Despite the pared-down enrollment estimates, government subsidies are slated to increase $18 billion in 2016, the CBO estimates.
“Subsidies for health insurance purchased through the exchanges that were established under the ACA [Affordable Care Act], as well as related spending, increased by $23 billion in 2015, to a total of $38 billion,” the CBO report stated.
In a footnote on page 16, the CBO stated that “subsidies that help people who meet income and other eligibility criteria to purchase health insurance through exchanges and to meet their cost-sharing requirements, along with related spending, are expected to increase by $18 billion in 2016, reaching a total of $56 billion.”
CBO also predicted that the tax subsidies to insurers participating in the exchanges will cost taxpayers $4,308 per each of the 11 million subsidized enrollees. In 2010, the agency estimated that it would cost $2,810 to cover each of 21 million enrollees expected to sign up by 2016.
“This leads to the conclusion that Obamacare exchanges are, in fact, high-risk pools for sick individuals who cannot get coverage elsewhere. They are not a properly functioning, broad-based market for health insurance,” writes [8] John Graham, senior fellow at the Independent Institute [9].
Related: Double-Digit Premium Hike Requests Signal Start of Obamacare ‘Death Spiral’ [10]
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