CBO Says Court's Healthcare Ruling Could Save $84 billion

The non-partisan U.S. Congressional Budget Office said on Tuesday that the Supreme Court ruling that upheld President Barack Obama's healthcare law could save the government some $84 billion over 11 years.

The savings comes largely from a portion of the decision giving the states an escape hatch from the law's expanded program of healthcare coverage for the poor. That expansion is funded jointly by the federal and state governments through the Medicaid program, so that any state that drops out gets less federal money.

The CBO estimated that about 6 million fewer people than anticipated will be covered by Medicaid as a result of states that opt out, lowering the overall cost to the federal government.

The CBO also said that repealing Obama's healthcare law would increase the deficit over the next decade by $109 billion.

The law's revenue increases and spending cuts total more than the cost of expanding coverage to the uninsured, CBO explained.

The latest measure of the healthcare law's cost is likely to become a factor in the presidential election-year debate over its merits and Republican efforts to repeal the law, Obama's top legislative achievement.

The congressional budget analysts estimated that the net cost of expanding medical coverage under the law, enacted in 2010, will total $1,168 billion over the next 10 years compared to an earlier estimate of $1,252 billion.

In its decision last month, the Supreme Court upheld the constitutionality of the so-called individual mandate, requiring Americans to obtain health insurance or face a tax penalty.

But the court said the federal government could not compel states to expand their existing Medicaid programs by threatening to disqualify them entirely from the costly coverage. The CBO said its latest estimate reflects the belief that some states will limit their expansion of Medicaid.

The healthcare reform law aimed to extend medical coverage to more than 30 million uninsured Americans.

But only about 3 million of those people will obtain coverage through one of the new insurance exchanges to be set up by 2014 under the law, CBO said, with another 3 million simply becoming uninsured.