ACA to Cost Government Less Than Expected

The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimate that the Affordable Care Act (ACA) will result in lower than expected net costs to the federal government. In July 2012, CBO and JCT estimated that the ACA’s effect would be to reduce federal deficits. The agencies now project a net cost of $36 billion for 2014, which is $5 billion less than the previous projection for the year; and $1,383 billion for the 2015 to 2024 period, which is $104 billion less than the previous projection.

The estimated net costs for 2014 stem almost entirely from spending for subsidies that are to be provided through insurance exchanges and from an increase in Medicaid spending. The following are projected net costs for the 2015 to 2024 period:
• Gross costs of $1,839 billion for subsidies and related spending for insurance through the exchanges, Medicaid, the Children’s Health Insurance Program (CHIP), and tax credits its for small employers.
• A partial offset of $456 billion in receipts from penalty payments, additional revenues resulting from the excise tax on high-premium insurance plans, and the effects on income and payroll tax revenues and associated outlays arising from projected changes in employer coverage.

Those estimates only address the insurance coverage provisions of the ACA, which do not generate all of the act’s budgetary effects. Many other provisions are expected to reduce budget deficits. For more information, visit

Last Updated 01/19/2022

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