One of the big features of the Affordable Care Act (a.k.a. health-care reform or Obamacare) is the creation of exchanges where people can buy subsidized insurance plans if they don't qualify via the workplace. There's a raft of implementation issues as states try to figure out whether they want to set up their own exchanges or go along with federal ones. Here's something that only makes 2014, the year Obamacare fully comes online, even more dread-worthy: The estimated cost of subsidizing plans through Obamacare's exchanges has grown from $3,970 in 2010 to $5,510. Here's John Merline of Investors Business:
The CBO's new baseline estimate shows that ObamaCare subsidies offered through the insurance exchanges — which are supposed to be up and running by next January — will total more than $1 trillion through 2022, up from $814 billion over those same years in its budget forecast made a year ago.
That's an increase of nearly 29%…
Last year, the CBO said the average exchange subsidy for those getting federal help when ObamaCare goes into effect next year would be $4,780. Its latest estimate raised that to $5,510 — a 15% increase. All these numbers are up even more from the CBO's original forecast made in 2010, which had the first-year subsidy average at $3,970.
The CBO also expects 7 million workers will lose their employer coverage due to ObamaCare, almost twice as many as it had previously said would be dumped. It expects tax penalties on individuals and companies who don't buy insurance to be $36 billion higher from 2014 to 2019 than it originally forecast.
Merline notes that the Congressional Budget Office (CBO) expects that Medicaid costs to come down more than before, so it estimates that total spending on Obamacare will stay around the same. Read the whole thing here.
Yet given the track record of major health-care entitlements—which almost always cost much more than anticipated—we should all expect Obamacare's costs to spiral upwards.
Merline also points readers to this recent survey of insurers in five cities by the American Action Forum. The good news is that if you're unhealthy and/or old, your premiums will likely go down by about 22 percent on average. The bad news is for younger and healthier folks on individual or small-employer plans: You premiums will increase by 169 percent on average.
Back in 2010, Reason TV offered "3 Reasons Health-Care Reform Won't Cut the Deficit by One Thin Dime." Watch it now below and read the text here.