CBO: Supreme Court ruling reduces PPACA's costs by $84B

The Congressional Budget Office (CBO) predicted in its July 24 report that the Supreme Court’s decision on the Patient Protection and Affordable Care Act (PPACA), which altered the legislation’s Medicaid expansion provision, will lower the law’s 11-year cost by $84 billion, due to a reduced number of Americans that will be covered under the Act.

To account for the Supreme Court decision that, in effect, gave states the choice to participate in a planned Medicaid expansion that was expected to be mandatory, the CBO and the Joint Committee on Taxation updated PPACA cost estimates published in March and determined that its net cost from 2012 to 2022 will be $1.17 trillion rather than $1.25 trillion.

Since some states are already expected to opt out of Medicaid expansion, the CBO’s most recent cost estimate predicted fewer people would become eligible for and enroll in Medicaid than previous cost estimates. Based on a new prediction with fewer enrollees, the CBO estimated the 11-year cost of Medicaid and CHIP will be $298 billion less than it previously had and the 11-year cost of tax credits and subsidies will be $210 billion more. Less significant changes in the CBO’s new estimate account for the additional $5 billion.

Prior to the Supreme Court's ruling, the office had suggested that new policies established by PPACA would cost federal agencies at least an estimated $115 billion between 2010-2019 to implement, in the form of explicit authorizations for future appropriations for a variety of grant and other program spending.

The CBO's July 24 report detailing its PPACA cost estimates is available here.