CBO Report Estimates “Significantly Lowered” Cost Of Funding ACA

New York Times: “Budget Office Slashes Estimated Cost Of Health Coverage.” As The New York Times explained on January 26, the CBO “significantly lowered its estimate of the cost” of the Affordable Care Act. According to CBO director Douglas W. Elmendorf, the new estimates show a 20 percent cost reduction from 2010 projections when the health care law was signed (emphasis added):

The Congressional Budget Office on Monday significantly lowered its estimate of the cost of providing health insurance coverage to millions of Americans under the Affordable Care Act.

Douglas W. Elmendorf, the director of the budget office, said the changes resulted from many factors, including a general “slowdown in the growth of health care costs” and lower projections of insurance premiums that are subsidized by the federal government.

In March 2010, when President Obama signed the health care law, the Congressional Budget Office estimated that the expansion of coverage would cost the federal government $710 billion in the fiscal years 2015 through 2019, Mr. Elmendorf said.

“The newest projections indicate that those provisions will cost $571 billion over that same period, a reduction of 20 percent,” he said. The Affordable Care Act not only subsidized the purchase of private insurance, but also authorized a major expansion of Medicaid, the federal-state program for low-income people. [The New York Times, 1/26/15]

Reuters: “CBO Lowers Cost Forecast For Obamacare's Insurance Subsidies.” On January 26, the nonpartisan CBO released their budget and economic outlook for 2015 through 2024. As Reuters explained, the CBO report found that “Obamacare will cost 7 percent less than expected over the next decade for federal subsidies.” [Reuters, 1/26/15]

Conservative Media Ignore CBO Report's Lower Cost Estimate To Hype ACA “Price Tag”

Fox's Varney: "New Figures Suggest That Obamacare Will Be Much More Expensive Than We Thought." On the January 27 edition of Fox News' America's Newsroom, network host Stuart Varney claimed that the CBO's report showed that “Obamacare is going to be much more expensive than we thought” and that these “uncovered” costs are “going into our deficit projections.” Varney didn't mention the CBO's finding that the ACA will cost less than expected. [Fox News, America's Newsroom, 1/27/15]

Fox's Hasselbeck: “Bombshell” Report Says Obamacare Will Cost "$50,000 In Taxpayer Money Per Person." During the January 27 edition of Fox News' Fox & Friends co-host Elisabeth Hasselbeck reported on the CBO's new estimates, saying the estimated cost of Obamacare would be “two trillion dollars” or "$50,000 in taxpayer money" for every insured American, omitting that the price has actually fallen. [Fox News, Fox & Friends, 1/27/15]

Wash. Examiner: ACA Will “Spend About $2 Trillion.” In a January 26 article, The Washington Examiner reported on the CBO's estimates on healthcare spending without noting that the analysis had actually lowered the cost of funding the ACA. Instead, the Examiner focused on the healthcare law's price tag of “about $2 trillion over the next decade”:

President Obama's healthcare law will spend about $2 trillion over the next decade on expanding insurance coverage but still leave 31 million Americans uninsured, according to an analysis from the Congressional Budget Office released on Monday.

When Obama pitched the healthcare law to Congress, he said it would cost “around $900 billion” over 10 years. But his statement was misleading because the way the law was designed, the major spending provisions didn't kick in until 2014. This meant that 10-year estimates at the time the law was passed in 2010 were artificially low, because they included four years (2010 through 2013) in which spending was negligible.

The new CBO analysis finds that between fiscal years 2016 and 2025, spending on the law's expansion of Medicaid will cost $920 billion and insurance exchange subsidies will cost nearly $1.1 trillion. The major spending provisions, taken together, will total $1.993 trillion. [Washington Examiner, 1/26/15]

Drudge Report: “Obamacare Price Tag: $50,000 Per Person!” On January 27, the Drudge Report hyped the “price tag” of the ACA as "$50,000 per person," without noting the fact that the estimated price is lower than initial expectations. [Drudge Report, 1/27/15]

UPDATE: Right-Wing Media's “Bombshell” ACA Price Tag Based On Faulty Math

PolitiFact Calls Claim That ACA Will Cost $50,000 Per Enrollee “False.” PolitiFact.com determined Stuart Varney's claim that the new CBO projections mean the ACA will cost "$50,000 per enrollee" over the next decade is false, noting that “none of the health care experts we reached, regardless of their economic philosophies or thoughts about health care law, found any merit in the math that produced this figure.” PolitiFact also pointed out that Varney's $50,000 cost estimate likely originated in a Daily Mail article claiming the CBO's most recent projections indicate a $1.35 trillion total cost over the next ten years to insure Americans under the ACA:

The basic math is correct. Divide $1.35 trillion by 27 million people and you get $50,000.

But health policy analyst Joe Antos at the American Enterprise Institute, a free-market oriented think-tank in Washington, told PunditFact that the number is meaningless.

“You can't divide a 10-year spending number by the average number of people who are newly insured,” Antos said. “That's not the way it works.”

We heard the same comment from Christine Eibner, a RAND health care economist. “It is analytically problematic to compare a single-year estimate of the change in the uninsured population to a 10-year projection of the costs,” Eibner said. [PolitiFact.com, 1/28/15]

This post has been updated to include additional analysis by PolitiFact.com.