By Jueseppi B.
*GOP picked another loser.
From Business Insider:
This CBO Report Is Another Big Win For Obamacare
More than 12 million people will gain health insurance under the Affordable Care Act this year, according to new projections released by the Congressional Budget Office Monday. And millions more stand to benefit from the law over the next decade.
At the same time, the law’s costs to the federal government are shrinking. According to the new projections, the federal government will spend more than $100 billion less on Obamacare’s coverage provisions through 2024 than previously projected. That includes a downward estimate of about $5 billion this year. Overall, spending on the federal and state insurance exchanges are projected to cost 14% less than originally forecast.
The CBO said plans offered through the exchanges are narrower, allowing companies to keep premiums low and the federal government to pay less in subsidies. The lower spending projections on the Affordable Care Act will help shrink deficits overall. The CBO said the federal government will now run a deficit of $492 billion in fiscal year 2014, which is almost a 33% decrease from 2013.
Through both the federal and state insurance exchanges and the expansion of the federal Medicaid program under the law, the CBO projects more than 12 million people now have insurance who wouldn’t have normally been covered in the absence of the law. The CBO also projects 19 million people will gain coverage by 2015, 25 million more by 2016, and 26 million more by 2026.
In 2014, according to the CBO, about 6 million people gained insurance from the exchanges and close to 7 million people benefitted from the Medicaid expansion. Those gains reduced the number of uninsured in the U.S. to 42 million —16% of the population. By 2024, the CBO projects, about 89% of U.S. residents will have health insurance.
Here’s a chart from the CBO showing the parallel universe between a U.S. with the Affordable Care Act in 2024 and one without it:
There’s one key difference between the CBO’s projections and a study released last week by RAND Corp., which said a net 9.3 million people had gained insurance coverage from September through March: The RAND study said most of those who gained coverage did so through employer-sponsored coverage, something the CBO said did not contribute to any relative gains in coverage.
The Obama administration has spent much of the past two weeks trumpeting the law in spite of a disastrous rollout. Former Secretary of Health and Human Services Kathleen Sebelius, who resigned last week, said 7.5 million people had enrolled in plans through the exchanges by the end of the law’s first open enrollment period on March 31.
Thank you Business Insider.
Updated Budget Projections: 2014 to 2024
As it usually does each spring, the Congressional Budget
Office (CBO) has updated the baseline budget projections
that it released earlier in the year.1 CBO now
estimates that if the current laws that govern federal taxes
and spending do not change, the budget deficit in fiscal
year 2014 will be $492 billion. Relative to the size of the
economy, that deficit—at 2.8 percent of gross domestic
product (GDP)—will be nearly a third less than the
$680 billion shortfall in fiscal year 2013, which was equal
to 4.1 percent of GDP.
This will be the fifth consecutive
year in which the deficit has declined as a share of GDP
since peaking at 9.8 percent in 2009 (see Figure 1).
But if current laws do not change, the period of shrinking
deficits will soon come to an end. Between 2015 and
2024, annual budget shortfalls are projected to rise substantially
from a low of $469 billion in 2015 to about
$1 trillion from 2022 through 2024—mainly because
of the aging population, rising health care costs, an
expansion of federal subsidies for health insurance, and
growing interest payments on federal debt. CBO expects
that cumulative deficits during that decade will equal
$7.6 trillion if current laws remain unchanged (see
Table 1). As a share of GDP, deficits are projected to rise
from 2.6 percent in 2015 to about 4 percent near the end
of the 10-year period. By comparison, the deficit averaged
3.1 percent of GDP over the past 40 years and
2.3 percent in the 40 years before fiscal year 2008, when
the most recent recession began.
From 2015 through
2024, both revenues and outlays are projected to be
greater than their 40-year averages as a percentage of
GDP. In CBO’s baseline projections, federal debt held by the
public reaches 78 percent of GDP by 2024, up from
72 percent at the end of 2013 and twice the 39 percent
average of the past four decades (see Figure 3 on page 5).
As recently as the end of 2007, federal debt equaled just
35 percent of GDP.
Such high and rising debt would have serious negative
consequences. Federal spending on interest payments
would increase considerably when interest rates rose to
more typical levels. Moreover, because federal borrowing
would eventually raise the cost of investment by businesses
and other entities, the capital stock would be
smaller, and productivity and wages lower, than if federal
borrowing was more limited. In addition, high debt
means that lawmakers would have less flexibility than
they otherwise would to use tax and spending policies to
respond to unexpected challenges. Finally, high debt
increases the risk of a fiscal crisis in which investors
would lose so much confidence in the government’s
ability to manage its budget that the government would
be unable to borrow at affordable rates.
CBO’s estimate of the deficit for this year is $23 billion
less than its February estimate, mostly because the agency
now anticipates lower outlays for discretionary programs
and net interest payments. The projected cumulative deficit
from 2015 through 2024 is $286 billion less than it
was in February: Though projected revenues are slightly
below the amounts that were previously reported, projected
outlays have dropped by more, largely because of
lower subsidies for health insurance under the Affordable
Care Act (ACA).
About This Document
This document is one of a series of reports on the state of the budget that the Congressional Budget
Office (CBO) issues each year. It satisfies the requirement of section 202(e) of the Congressional
Budget and Impoundment Control Act of 1974 that CBO submit to the Committees on the
Budget periodic reports about fiscal policy and its baseline projections of the federal budget.
Jared Brewster and Amber Marcellino of CBO’s Budget Analysis Division prepared the report with
assistance from Mark Booth and with guidance from Jeffrey Holland, Theresa Gullo, Holly Harvey,
Peter Fontaine, and David Weiner. The estimates described here were the work of more than
100 people at CBO and many people on the staff of the Joint Committee on Taxation.
In keeping with CBO’s mandate to provide objective, impartial analysis, this report makes no recommendations.
Robert Sunshine reviewed the report, Benjamin Plotinsky edited it, and Maureen Costantino and
Jeanine Rees prepared it for publication. An electronic version is available on CBO’s website
Douglas W. Elmendorf
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