A report from the Congressional Budget Office shows that the cost of the Patient Protection and Affordable Care Act (PPACA) is rising, largely due to dramatic increases in Medicaid enrollment.
More people have signed up for Medicaid in the past year than the nonpartisan budget agency anticipated a year ago. Anticipating enrollment has been tricky, however, because enrollment is so closely tied to political decisions made by state leaders.
In the past year a number of states that previously rejected the big cash offer from the federal government to expand Medicaid have reversed their decision, adding thousands to their Medicaid rolls.
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Sixty-eight million Americans get health care through Medicaid or the Children's Health Insurance Program, 16 million more than projected when the PPACA was signed into law in 2010.
While Medicaid enrollment has soared, far fewer people than expected have signed up for private health insurance plans offered through the federal and state marketplaces that offer coverage for those with incomes too high to qualify for Medicaid.
The CBO estimates that roughly 12 million individuals are enrolled in marketplace plans. As recently as a year ago, the agency had projected that 21 million would be enrolled by this point. Now, it is projecting that marketplace enrollment will rise to 15 million next year and ultimately reach between 18 million to 19 million in 2018.
The CBO also highlighted the fiscal implications of rising federal spending on health care programs. The percentage of the federal budget devoted to health programs will increase from 29 percent to 32 percent in the next ten years, although much of that is attributed to the ever-growing number of Medicare beneficiaries, a trend unrelated to the PPACA. In fact, the Obama administration has championed a number of strategies aimed at reining in Medicare spending, including tying reimbursements to outcomes, rather than services.
Of the $660 billion the federal government spends subsidizing care for non-seniors, $103 billion of it is directly attributable to the PPACA. That includes the $39 billion in tax credits and cost-sharing reductions given to individuals with marketplace insurance plans and $64 billion spent to provide expanded Medicaid coverage.
But the biggest health expenditures came from programs and policies that existed before the PPACA, including $203 billion spent on those who were eligible for Medicaid under the old rules and $266 billion tax break that employers get to provide health insurance to employees.
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