The CBO attributes the additional savings to government, relative to the CBO’s last assessment from February 2014, to lower-than expected premiums, which in turn lowered the cost for exchange subsidies, and higher-than expected revenues from the excise tax on high-premium insurance plans.
“Despite projecting that slightly more people will receive insurance coverage through exchanges over the 2015–2024 period than they had anticipated previously,” the report says. “CBO and JCT project that costs for exchange subsidies and related spending will be $164 billion (or 14 percent) below the previous projection, mainly because of the downward revision to expected exchange premiums.” The office also predicted that plans offered in the exchanges will provide wider provider networks and higher reimbursement rates to providers as enrollment increases. “That pattern will put upward pressure on exchange premiums over the next couple of years, although CBO and JCT anticipate that the plans’ characteristics will stabilize after 2016,” it found.
The office also concluded that the law’s so-called shock absorbers — reinsurance payments that are distributed to insurers that attract high-cost enrollees — “reduced exchange premiums this year by approximately 10 percent” and will “reduce premiums by smaller amounts in 2015 and 2016.” CBO found additional savings in Medicaid, revising downward government spending per adult enrolled in the program.
Ultimately, 12 million more nonelderly people will have health insurance in 2014 as a result of the law. Twenty-six million more “will be insured each year from 2017 through 2024 than would have been the case without the ACA,” the CBO concluded.