A similar version of this Health Alert appeared at Forbes.
Last summer, my colleague Devon Herrick accused the Centers for Medicare & Medicaid Services of looking at Medicare’s solvency through rose-colored glasses. Well, CMS has passed those shiny spectacles to another government agency.
In the January 2015 Budget and Economic Outlook, the Congressional Budget Office (CBO) has pronounced that Obamacare’s future costs will be seven percent less than were projected in April 2014. Looking even further back in the rear-view mirror, the CBO itself has an even more exciting story to tell:
In March 2010, CBO and JCT projected that the provisions of the ACA related to health insurance coverage would cost the federal government $710 billion during fiscal years 2015 through 2019 (the last year of the 10-year projection period used in that estimate). The newest projections indicate that those provisions will cost $571 billion over that same period, a reduction of 20 percent (p. 129).
Table 1 decomposes this $139 billion of reduced costs over the five-year period. It shows that $5 billion are due to higher tax receipts than originally projected, while $134 billion are due to reduced costs.