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ACA Subsidies Are Much Cheaper Than Expected: CBO

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Low enrollment in Affordable Care Act exchange plans could help cut spending on ACA subsidies from now through 2026, even if the current ACA subsidy rules stay the same.

Analysts at the Congressional Budget Office predicted today, in a new report, that federal spending on subsidies for three major ACA individual health insurance subsidy programs could amount to just $729 billion over the period from 2017 through 2026.

That’s 16% lower than the ACA subsidy estimate the CBO analysts published in March 2016. 

(Related: 3 Weird Ways an ACA Subsidy Cut Could Help You)   

In other 10-year spending estimates, the analysts:

  • Cut the total for the ACA premium tax credit subsidy 15%, to $568 billion, or an average of about $57 billion per year.

  • Cut the total for the ACA cost-sharing reduction subsidy program 27%, to $95 billion, or an average of about $9.5 billion per year.

  • Cut the total for the tax revenue lost to the employer group health coverage cost tax exclusion 0.6%, to $3.6 trillion, or an average of about $360 billion per year.

The CBO says enrollment in most types of health coverage could be about the same as it is now, and about the same as it would be in 2026 under the current ACA rules.

The CBO now expects about 18 million people to have individual coverage in 2026. That would be up from 17 million today, but down from the total of 25 million that the CBO published in March 2016.

The CBO has posted a copy of the report here.

President Donald Trump’s budget proposal for fiscal year 2018, which starts Oct. 1, shows that the federal government could raise about $3.7 trillion in 2018 and spend about $4.1 trillion on programs of all kinds.

The country spends about $3.5 trillion per year on health care.

— Read ACA Waiver Proposals Are Hard to Score: CBO Chief on ThinkAdvisor.

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