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Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision 1 (July 2012)

handle is hein.congrec/cbo10829 and id is 1 raw text is: JULY 2012
Estimates for the Insurance Coverage Provisions of
the Affordable Care Act Updated for the Recent
Supreme Court Decision
The Congressional Budget Office (CBO) and the staff of the Joint Committee on
Taxation (JCT) have updated their estimates of the budgetary effects of the health
insurance coverage provisions of the Affordable Care Act (ACA) to take into
account the Supreme Court decision issued on June 28, 2012.' This report
describes those new estimates, how they were derived, and how they differ from
the previous ones.
The insurance coverage provisions of the ACA establish a requirement for most
legal residents of the United States to obtain health insurance or pay a penalty tax;
create insurance exchanges through which certain individuals and families may
receive federal subsidies to substantially reduce their cost of purchasing health
insurance: significantly expand eligibility for Medicaid-now at each state's
option; impose an excise tax on certain health insurance plans with relatively high
premiums; establish penalties on certain employers who do not provide minimum
health benefits to their employees; and make other changes to prior law.2
The Supreme Courtfs decision has the effect of alowing states to choose whether
or not to expand eligibility for coverage under their Medicaid program pursuant to
the ACA. Under that law as enacted. but prior to the Court's ruling, the Medicaid
expansion appeared to be mandatory for states that wanted to continue receiving
federal matching funds for any part of their Medicaid program..3 lence, CBO and
JCT's previous estimates reflected the expectation that every state would expand
1 See National Federation of Independent Business v. Sebelius, 132 S. Ct. 2566 (2012). The ACA
comprises the Patient Protection and Affordable Care Act (Public Law 111-148) and the health
care provisions of the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152). As
used here, the term ACA includes the effects of subsequent related changes in statute.
2 For more information on the insurance coverage provisions of the ACA, see the statement of
Douglas W. Elmendorf, Director, Congressional Budget Office, before the Subcommittee on
Health, House Committee on Energy and Commerce, 20'A m!:is ?te  o Ie// Ce
L(:g~s'atot E~ct di, Mrc 210(March 30, 2011).
SCBO and JCT's previous estimate of the effects on insurance coverage of the ACA, before the
Court's decision, were reflected in the projections contained in Congressional Budget Office,
' :,ate , dg-e P,'jccio~s Fica L:'aw202 t 222(March 2012) and further described in
Congressional Budget Office,Up -  itimsj, te/.s¢tacCofc,:: Povsos , th
d{2rdai  Cre ct(March 2012).

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