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Fewer to get health insurance under reform law, CBO says

The new health care reform law is not going to provide health insurance for as many people, at least not as quickly, as the Obama administration had hoped, according to the latest look at the economy from the Congressional Budget Office.

That’s mostly because of the deal Congress made last month to keep the country from going over the fiscal cliff, the CBO says. About 8 million people who would have been insured by their employers will probably lose their coverage because of tax changes, the CBO projects.

It takes away some of the tax breaks that employers get for providing health insurance to workers and their families. The change “will lead to a greater reduction in such coverage and higher enrollment in insurance exchanges than previously estimated by CBO,” the report reads.

Some of those affected are likely to buy health insurance themselves on the new insurance marketplaces, called exchanges, that are supposed to be up and running by October, and some will become newly eligible for Medicaid, the joint state-federal health insurance plan for the low-income. The new law encourages states to expand Medicaid so more people can qualify -- subsidized by the federal government for the first few years.

But overall, instead of 32 million to 34 million new people getting health insurance by 2017, probably only about 27 million people will be covered by then, the CBO projects.

One of the main objectives of the 2010 Affordable Care Act was to get people signed up for health insurance. About 18 percent of Americans under the age of 65 don’t have health insurance, according to the non-profit Kaiser Family Foundation. That means they don't get medical care when they need it, instead waiting until they are really sick, and using emergency room and other last-minute services that cost far more than if they'd received routine care.

About 55 percent of Americans get health insurance provided by an employer. Others have Medicaid, Medicare, Tricare for military families, and other government insurance.

Starting in 2014, many more are supposed to buy their own health insurance on the exchanges, which will be heavily regulated to ensure they get good coverage.

The CBO projects that 26 million people will buy health insurance on the exchanges by 2022. And it predicts that 12 million people will become newly eligible for Medicaid in the states that choose to expand their offerings by 2022.

“In the current projection, the number of people gaining coverage through the exchanges rises from 7 million in 2014 to 24 million in 2016, and the number gaining coverage through Medicaid rises from 8 million in 2014 to 11 million in 2016,” the report reads.

There’s some good health care news for the administration in the CBO report. “In recent years, health care spending has grown much more slowly both nationally and for federal programs than historical rates would have indicated,” the CBO says.

So it’s made “technical adjustments” to how much Medicaid and Medicare will cost.From the March 2010 baseline to the current baseline, such technical revisions have lowered estimates of federal spending for the two programs in 2020 by about $200 billion—by $126 billion for Medicare and by $78 billion for Medicaid, or by roughly 15 percent for each program,” the CBO says.

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