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CBO Projects Lower ACA Costs

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CBO Projects Lower ACA Costs

April 16, 2014

On April 14, the Congressional Budget Office (CBO) released an updated report which includes projections on Medicare, Medicaid, and Affordable Care Act (ACA) spending. The latest projection shows that coverage under the ACA's expansions will cost about $104 billion less over the next ten years than the CBO's estimate released last February. This lower amount is due to lower penalties from the uninsured and employers and higher revenue from excise taxes, among other factors. The report projects that Medicaid costs will rise from 1.7 percent of gross domestic product to 2.1 percent over the next decade. This increase is attributable to Medicaid expansion under the ACA as well as increased per person Medicaid expenditures. Medicare spending is projected to stay fairly flat, with increases occurring towards the tail end of the ten-year window CBO made projections for.

Source: Inside Health Policy