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Supreme Court decision scales back cost, coverage of healthcare law

July 24, 2012|By Noam N. Levey
  • Supporters of President Obama's healthcare law celebrate outside the Supreme Court in Washington. A new Congressional Budget Office report estimates fewer Americans will receive insurance under the healthcare law as a result of the court's ruling.
Supporters of President Obama's healthcare law celebrate outside… (David Goldman / AP File Photo )

WASHINGTON -- Fewer Americans will likely get health insurance over the next decade under President Obama’s healthcare law as a result of the Supreme Court’s decision to limit it, according to a new analysis of the landmark ruling.

At the same time, the court’s decision to allow states to opt out of a major expansion of the government Medicaid insurance program for the poor could also save taxpayers $84 billion by 2022, the nonpartisan Congressional Budget Office estimates.

The new projections confirm that the court’s ruling will not fundamentally alter the law that Obama signed in 2010.

The budget office, which Congress relies on to study the impact of proposed legislation, still estimates that the Affordable Care Act will reduce the number of Americans without health coverage by some 30 million over the next decade.

And the law will continue to lower the federal deficit because the costs of expanding coverage are offset by new taxes and cuts in other federal spending. Repealing the law, in contrast, would increase the deficit by $109 billion, budget analysts said.

But the Congressional Budget Office estimates that the court’s decision will lead to major variations across the country in how states implement the law.

The law originally required states to expand their Medicaid programs in 2014 to cover all Americans making less than 138% of the federal poverty level, or about $15,400 for a single adult. Today, Medicaid is mostly limited to poor families, the elderly and the disabled.

The Medicaid expansion, a cornerstone of the law, was originally expected to extend coverage to as many as 17 million uninsured people.

But the Supreme Court ruled last month that states could not be required to open up their Medicaid programs. And since then, several Republican governors have indicated they will refuse federal aid for the expansion.

The Congressional Budget Office estimated that by 2022, about a sixth of Americans who would have been eligible for Medicaid will be living in states that do not expand their programs.

Despite being barred from Medicaid by their state, some of these people will nonetheless qualify for federal subsidies to buy private health insurance on their own. Overall, analysts estimated that about 6 million fewer people will enroll in Medicaid; 3 million of these will receive subsidies.

But the poorest – those making less than the poverty level – will not have access to these subsidies. Many of these people are expected to remain uninsured, leaving an additional 3 million people without coverage.

Another third of the newly eligible are expected to live in states that fully implement the new law and expand their Medicaid programs.

The remainder will likely live in states that only partially expand their Medicaid programs, according to the budget office.

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noam.levey@latimes.com

Twitter: @noamlevey

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