Statement from Chairman Murray on CBO Projections that the Affordable Care Act Will Cost Less, Cover More Americans, and Reduce the Deficit Further
Apr 14 2014
(Washington, D.C.) – Today, Chairman Patty Murray (D-WA) issued the following statement on new information from the Congressional Budget Office (CBO), which projected that the Affordable Care Act will decrease the federal deficit over the next ten years by $104 billion more than was projected only two months ago.
“Today’s CBO update shows once again that the Affordable Care Act will help reduce our deficits while offering more Americans access to quality, affordable health care,” said Chairman Murray. “We need to keep building on this progress rather than turning back the clock on the millions of people who have now signed up for coverage.”
The primary driver of these additional savings is that insurance premiums for plans purchased on the health insurance exchanges will be significantly lower than CBO had previously estimated, while more people will be covered under the law. The average expected subsidy in 2014 is about $300 (or 6 percent) cheaper than the CBO's February projections. The 2024 projected subsidy is $1,200 (or 14 percent) less than the earlier projection. In short, the CBO estimates that more people will be covered for less money than previous estimates.
Following are a few highlights from the CBO’s update:
- Because Exchange premiums will cost less than previously projected, the cost of subsidies will fall by $165 billion over the next ten years. The second-lowest-cost silver plan, which is the benchmark used for determining subsidies, will cost 15% less in 2016 than the CBO had previously estimated. As a result of lower premiums, overall spending on subsidies will decrease.
- The CBO credits the ACA with covering 12 million more non-elderly people this year alone than in the absence of the ACA. This number will increase to 19 million more insured people in 2015, 25 million more by 2016, and 26 million more by 2017. Without the ACA, 20% of Americans would be uninsured. The CBO is projecting that this percentage will be cut almost in half to 11% by 2016.