Way, Way Over Budget: ObamaCare Subsidies

And studies find that it's increased premiums
By Kevin Spak,  Newser Staff
Posted Jun 18, 2014 11:11 AM CDT
Way, Way Over Budget: ObamaCare Subsidies
FILE - This Wednesday, Nov. 27, 2013, file photo, taken in Washington, shows part of the HealthCare.gov website page featuring information about the SHOP Marketplace. People who have accounts on the enrollment website for President Barack Obama’s signature health care law are being told to change their...   (AP Photo/Jon Elswick, File)

ObamaCare appears to be on pace to cost the federal government a lot more than it was counting on. So far, the government is on pace to sink $11 billion into subsidies for consumers who bought coverage on the federal insurance exchange, according to a new report from the Department of Health and Human Services. If things are going similarly for state-run exchanges, the total subsidy bill could be $16.5 billion, the LA Times estimates—the Congressional Budget Office had predicted a cost of just $10 billion.

The bump is a result of more people than expected buying coverage. The subsidies, available to anyone making less than four times the poverty level, lowered the cost of coverage by an average of 76%. The report comes alongside two new analyses showing that, if you don't count those subsidies' effects, ObamaCare has dramatically increased the price of coverage. A Manhattan Institute study, reported at Forbes, found that premiums for individually-purchased care rose an average of 49%, though some markets, like New York City, saw dramatic decreases. Another study, from conservative economist Mark Pauly, found a more modest increase of 14% to 28%, the Washington Post reports. But the comparison is difficult, Pauly notes, because post-ObamaCare plans offer more benefits. (More ObamaCare stories.)

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