Good News! Obamacare Will Cost Less than Projected

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.

As long as we’re on the subject of healthcare, have you heard about the conservative discovery that Obamacare is going to cost $111 billion more than originally projected? No? Good for you. It means you have a life.

But I don’t, and in case you have heard about this you might also want to hear the actual story. Jonathan Cohn has you covered:

After the Affordable Care Act became law, the administration became aware of a glitch in the law….Congress responded by amending the law, to redefine who would be eligible for Medicaid.

….As a result, some people who would have gotten their insurance through Medicaid will now get their health insurance through the new exchanges….That makes the overall cost of subsidies a lot higher. Throw in some changes in economic forecasting, and you get that extra $111 billion in subsidies.

But that’s only half the story! The cost of subsidies has gone up, because more people will be getting insurance through the exchanges. But the cost of Medicaid has gone down, because, among other things, fewer people will be getting coverage through that program. Overall, the administration now projects the ten-year Medicaid cost to decline by $272 billion.

So, um, subtract two, carry the one, and….you end up with net cost reduction of $161 billion over ten years. The actual number might end up being different once the accounting boffins grind all the way through their spreadsheets, but it looks a lot like it’s going to be negative.

It’s worth pointing out, once again, the object lesson here: Obamacare isn’t perfect. It’s not set in stone. Stuff is going to go wrong and it’s going to get fixed. In a few cases, like the CLASS Act, things just aren’t going to work out and some element of the law will be abandoned. In other cases, like this one, mistakes will be corrected and costs will change modestly either up or down. And in still others, there’s really nothing wrong at all and conservatives are just trying to gin up some faux outrage. So take everything you hear with a grain of salt. Every big bill has problems, and those problems get addressed as implementation goes forward. Obamacare will be no different.

Fact:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and billionaires wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2022 demands.

payment methods

Fact:

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2022 demands.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate