Obamacare Medicare coverage much higher than expected

The cost of Obamacare is expected to rise as millions of low-income people unexpectedly enrolled in public health care coverage rather than private insurance, according to a new government report.

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These runoff costs, detailed in a report released Thursday, over the next decade are projected to be $146 billion higher than expected for the publicly funded Medicaid program, in spite of the fact that 19 states refuse to participate in the program at this time. The numbers indicate that the federal government fell far short in estimating how many people would enroll in government coverage rather than tax-subsidized but private health insurance.

According to the report, Medicaid and Children's Health Insurance Program enrollees will total 68 million people in 2016 – or 16 million more people than anticipated six years ago, when the law passed. In 2015, Medicaid enrollees increased by 3 million, and by 2026 an additional 6 million are expected to enroll.

The projections were conducted by the Congressional Budget Office, a nonpartisan agency that estimates the economic effect of a bill's passage. They do not include spending on adults 65 and older, who are enrolled in the government's Medicare program, and some of whom also receive Medicaid to help pay for nursing home costs and other needs.

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The number of Medicaid enrollees are particularly remarkable because under Obamacare the expansion program was expected to be significantly larger. The health care law, formally known as the Affordable Care Act, made it mandatory for all states to expand Medicaid's eligibility to people making less than $16,243 a year. Several governors contested the law, however, and in 2012 the Supreme Court ruled that states could decide whether they wanted to participate in the program.

So far, 31 states and the District of Columbia have enacted the expansion, but even so the number of Medicaid enrollees is higher than budget analysts predicted in 2010, before they knew the provision would be changed by the Supreme Court.

State lawmakers have said that they are concerned that expansion will be too costly for them, particularly because under the law the federal government gradually dwindles its share of support for the program. A higher-than-expected enrollment in other states could underscore the costs and increase reluctance to expand. In addition, the budget office report shows that half of those who were newly enrolled in Medicaid did so in states that did not expand the program, meaning they may not have known they were eligible before, or were trying to abide by the federal mandate to have insurance. A spokesperson from the budget office also said that wage growth and income projections were lower than they expected when they scored the bill six years ago.

The White House has projected that if all states were to expand Medicaid, then an additional 4 million more people would become eligible for the program. The Centers for Medicare and Medicaid Services has or plans to spend $150 million on awareness campaigns to continue informing people of their enrollment eligibility, according to a statement from the agency, and the budget office projects that more states will expand Medicaid during the next decade.

What has fallen far short of enrollment projections, according to the report, is the number of low- and middle-income people who are covered by private health care plans through online exchanges, or marketplaces, that are tax-subsidized by the federal government. When the law passed, the budget office projected that 21 people would enroll through these plans. Now, that number has dropped to 12 million.

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Experts have debated over the cause of this. Some point to numerous complaints Americans have had about the cost of using these plans. The Centers for Medicare and Medicaid Services, as well as the Congressional Budget Office, has said that they expected fewer employers would offer health insurance plans to employees, leading them to the marketplaces, but so far that trend hasn't occurred. Also, unlike Medicaid, in which people can enroll at any time, most people who enroll in marketplace plans have a certain window of time in which to do so.

The shortfalls in marketplace enrollment have in large part contributed to lower-than-expect spending in the short term. According to the report, the law's short-term cost is estimated to be 25 percent less than was projected six years ago, costing a total of $466 billion over the next four years.

But as the number of enrollees in these plans grows, so will the cost of covering them. The budget office projects that the numbers will grow to 15 million next year, and will rest somewhere between 18 million and 19 million from 2018 to 2026. Over this long-term period, the net cost of Obamacare is estimated to be $136 billion, or 11 percent higher than projected. The numbers take into account that Congress delayed Obamacare's "Cadillac Tax" on high-cost insurance plans, foregoing $28 billion in revenue.

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