WASHINGTON (Reuters) - President Barack Obama’s landmark healthcare reform law will extend coverage to 2 million fewer uninsured Americans than expected only a few months ago, congressional researchers said on Tuesday.
A new report from the nonpartisan Congressional Budget Office said 25 million people who currently lack insurance will obtain coverage through subsidized marketplaces or an expanded Medicaid program over the coming decade, down from a February CBO estimate of 27 million people.
The office attributed the drop to a change in administration policy that will exempt 500,000 to 1 million more people from the law’s individual mandate, which levies a fine on those who fail to obtain health coverage beginning in 2014.
There are nearly 49 million uninsured people in the United States, according to the Census Bureau. The number of uninsured expected to gain coverage under the law has been declining since last June, when the U.S. Supreme Court allowed states to opt out of the Medicaid expansion.
The broader mandate exemption, and the accompanying reduction in revenue from fines, is one factor behind a $39 billion rise in the net cost of providing coverage under the law.
The law offers tax credits to help low-to-moderate income people pay premiums and rich subsidies to states that expand their Medicaid program for the poor. Coverage provisions are now expected to cost a net $1.36 trillion.
The Patient Protection and Affordable Care Act is due to take full effect on January 1. But the administration faces mounting political pressure from Republicans who want it repealed and Democrats who worry that implementation could fail just as the 2014 midterm congressional election campaign gets under way.
The new online marketplaces, or exchanges, and Medicaid are expected to provide coverage to 37 million people overall by 2023, including employees of small businesses and consumers who switch from plans in the individual market. The total includes about 1 million fewer exchange beneficiaries, with a roughly equal-size gain in Medicaid recipients.
With fewer people expected to pay fines for remaining uninsured, the CBO said mandate revenues will fall by $7 billion, to $45 billion, compared with February’s estimates.
The agency also expects a $58 billion drop in excise tax revenue on private insurance plans and $10 billion less from penalties on employers, due in part to an expected increase in employment-based insurance.
Reporting by David Morgan; Editing by Dan Grebler