President Obama's health care law will cost slightly more than $2 trillion over the next decade, according to a new report from the Congressional Budget Office.
The CBO report also said the health care law will distort the economic
incentives for individuals to work and thus the nation will lose the equivalent
of 2.5 million full-time jobs by 2024.
When Obama sold the health
care law to Congress in 2009, he said it would cost "around $900 billion," but that was only because the major
provisions were delayed until 2014. Now that they have been implemented, the
cost of expanding Medicaid and subsidizing individuals to purchase insurance on
the exchanges will be just over $2 trillion from 2015 to 2024, CBO
The health care law also includes taxes and cuts to Medicare that previous
CBO estimates have said would more than offset the costs, though the new report
doesn't include a full deficit analysis incorporating these offsets.
According to the report, 6 million individuals will obtain insurance through
the exchanges in 2014, which is down slightly from the CBO's earlier 7 million estimate, but still much more optimistic than would
have been expected last fall, when technical problems plagued the rollout of the
The CBO also said that the "risk corridors" program — which has been billed
as a "bailout" for insurers — would actually generate a net savings of $8
billion from 2014 through 2016, though it didn't give a year by year breakdown
and cautioned that there were "many uncertainties" surrounding the CBO estimate
due to the limited government experience with such programs.
On the employment front, CBO said, "The reduction in CBO's
projections of hours worked represents a decline in the number of
full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5
million in 2024."
CBO wrote that, "For some people, the availability of exchange subsidies
under the ACA will reduce incentives to work."
CBO cautioned that this estimate, too, was subject to "substantial