The only surprise, perhaps, is that the LA Times is covering it:
The large subsidies for health insurance that helped fuel the successful drive to sign up some 8 million Americans for coverage under the Affordable Care Act may push the cost of the law considerably above current projections, a new federal report indicates.
Nearly 9 in 10 Americans who bought health coverage on the federal government’s healthcare marketplaces received government assistance to offset their premiums…
Premiums that normally would have cost $346 a month on average instead cost consumers just $82, with the federal government picking up the balance of the bill.
While the generous subsidies helped consumers, they also risk inflating the new health law’s price tag in its first year.
“The federal government picking up the balance of the bill”—wonder where that money will come from?
Who could have predicted such a thing?
[UPDATE 6/19: I see that the LA Times has changed the headline of the story to “Obamacare subsidies on track to cost billions this year, report says,” as well as some of the text, and issued a correction which reads as follows:
Because of an error in calculations, a previous version of this article incorrectly stated that a new federal report indicates that the cost of insurance subsidies under President Obama’s healthcare law may be running above current projections. The figures in the report actually suggest that the cost of the subsidies is roughly in line with current projections from the Congressional Budget Office.
So, in the first version of the piece the Times apparently did the math wrong, or got the projection numbers wrong, or made some other error (which is also no surprise). I can’t independently verify whether the Times was correct before, correct now, or correct neither time (it’s unlikely they were correct both times, so I’ll leave out that choice, but certainly the entire incident does not engender increased faith in the abilities of the Times to report on a story).
I also note the careful wording of the correction: “may be running,” “suggest,” and “roughly,” as well as that phrase “current projections,” which occurs twice in the correction. How do “current projections” compare to the projections made at the time the ACA was passed?
At any rate, although it’s certainly worse if subsidies are higher than expected versus the same as expected, by far the most important point is whether they are too high. The article says:
The Congressional Budget Office estimated in April that the annual cost of subsidies will rise to $23 billion next year and $95 billion in 2024, although the budget office continued to project that all the law’s costs will be offset by additional revenue it raises and by cuts in other federal healthcare spending.
Embedded in that sentence is quite a tale. That’s a lot of money any way you slice it, plus a projection about the offset that is still unknown—and of course those other unspecified “cuts” will come from somewhere, almost certainly Medicare.
And although I knew that Obamacare subsidies would be widespread in the exchanges, I find it pretty shocking that it’s at the rate of 9 in 10 (assuming, of course, that the Times is reporting that figure correctly). An incredible rate of government dependence, and purposeful.]