Last week, I mentioned that the CBO will be issuing an updated projection for PPACA costs sometime next month.
The Congressional Budget Office will take their new information on enrollment and run it through their model. Their model will say that the subsidies for the first year of operation are higher than projected from the last run of the model in February.
The February projection assumed a $9 billion cost reduction mainly because a million people it had previously assumed would have signed up would not have signed up. Oops!
Right now it looks like the extended open enrollment via the “blue box” method is bringing in even more people.
ACASignups.net passes along the nugget that California has 500,000 in the extended enrollment (started but not completed) status. Charles makes a soft projection of the national implications of that number:
if they were the only state which did this (which is what it sounds like), it suggests that instead of 20% of the total, that 500K is more likely perhaps 1/3 of the national total….
So…I really don’t know. My best guess at this point is that we may be looking at somewhere between 1.0 – 1.5 million additional exchange QHP enrollments during the 4/1 – 4/15 period.
So the CBO headline will not be that Obamacare costs $9 billion more than projected, but $13 or $15 or $20 billion dollars more than projected. The CBO will probably not alter their out-year projections for total uptake as they’ll model the person that they assumed would have skipped out on 2014 enrollment but entered the Exchange in 2015 will have just entered a year “early”.
The increase in cost will be due to two factors. The first is increased subsidy costs. 80% of the people on the Exchange qualified for subsidy. If that ratio holds, that means an additional 800,000 to 1,200,000 people will be getting monthly subsidies. The second factor is that fewer people will be paying the mandate penalty. The absolute lowest revenue loss would be $100 million dollars, probable revenue loss is $300 to $500 million dollars.
Overall, increased costs and decreased revenue because more people than projected are getting covered is a very good thing, but it will produce another round of stupid ads and even dumber pundit bloviation.