Health care law’s coverage, cost shrink after ruling, CBO says

The Congressional Budget Office on Tuesday reduced its coverage and cost estimates for the national health care law to reflect last month’s Supreme Court ruling on the law.

Though the court upheld most of the law -- President Obamas signature domestic achievement — it struck down a requirement that states expand their Medicaid programs. Since the decision, several states’ Republican governors have said they will not expand Medicaid, despite full federal funding from 2014 to 2016. The federal funding will drop to 95 percent in 2017 and to 90 percent in 2020.

Because the expansion is no longer mandatory, the CBO said, about 3 million fewer people than originally estimated will have health insurance by 2022.

With fewer people receiving government-subsidized coverage, the net cost of the Affordable Care Act between 2012 and 2022 will be $84 billion less than anticipated, the CBO estimated. The cost reduction from $1.25 trillion to $1.17 trillion represents a 7-percent drop.

Critics of the national health care law quickly tried to counter supporters who might hail the smaller price tag.

“The Congressional Budget Office is telling us Obamacare will be a slightly smaller failure than we thought,” said Steve Stanek, a research fellow in budget and tax policy at the Heartland Institute. “This is hardly reason to celebrate, even if we accept CBO numbers, which often are dubious.”

In a separate report, the CBO estimated that House Republicans’ plan to repeal the health care law would inflate federal budget deficits by $109 billion between 2013 and 2022. Presumptive Republican presidential nominee Mitt Romney has vowed to repeal the law if elected.

While repeal of the law would cut spending by $890 billion in that period, the CBO said, it would also reduce revenues by almost $1 trillion.