The Affordable Care Act ("Obamacare") was projected by the Congressional Budget Office to reduce the national deficit. When Obamacare went to the Supreme Court, the court ruled that it was constitutional so long as states could refuse medicaid expansion that would have been paid for entirely by the federal government until 2020 (at which point 90% of the expansion would be covered by the federal government). Several states have decided to opt out of medicaid expansion. What affect does that have on the estimated deficit reduction of Obamacare?
What Is the Net Budgetary Impact of the Coverage Provisions Taking Into Account the Supreme Court’s Decision?
CBO and JCT now estimate that the insurance coverage provisions of the ACA will have a net cost of $1,168 billion over the 2012–2022 period—compared with $1,252 billion projected in March 2012 for that 11-year period—for a net reduction of $84 billion. (Those figures do not include the budgetary impact of other provisions of the ACA, which in the aggregate reduce budget deficits.)
The projected net savings to the federal government resulting from the Supreme Court’s decision arise because the reductions in spending from lower Medicaid enrollment are expected to more than offset the increase in costs from greater participation in the newly established exchanges.