The Incredible Shrinking PPACA

When Congress passed the PPACA, the Congressional Budget Office projected the law would result in an additional 32 million people getting health coverage within a decade.  In 2011, CBO was even more optimistic, predicting the law would lead to coverage for 34 million people.  Now, as Bloomberg reports, the CBO has changed its tune.  According to the CBO’s latest estimates, the PPACA will lead to only 27 million people gaining coverage.  One factor is the refusal of some governors to participate in the Medicaid expansion.  Another is that millions of Americans are expected to lose their employer-based coverage, a point the WSJ emphasizes in this story.

The CBO has long said it expects the new federal health law will prompt some companies to drop millions of employees from health plans because workers have new options to buy insurance on their own. In August, CBO put the number at four million over 10 years. Now it’s seven million.

The fiscal cliff deal is part of the cause, as higher tax rates would have provided a greater incentive for employers to offer employer-based coverage in lieu of taxable wages.  So could rapidly increasing health insurance premiums.  As Politico reported, some populations could see premiums triple.

Meanwhile, according to this report, Minnesota Governor Mark Dayton (D) is apparently concerned that “ObamaCare” could swallow “MinnesotaCare,” resulting in higher insurance premiums for poor families.  Minnesota has sought a waiver, but there’s no word on how HHS will respond.

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