The Congressional Budget Office (CBO) has reduced its budget deficit estimate over the next decade because of lower projected costs for the Affordable Care Act.
Updated projections released March 9 by the CBO find cumulative deficits between 2016 and 2025 will be $431 billion less than the office’s January projection of $7.6 trillion.
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Lower costs for ACA provisions driven by smaller spending growth for insurance subsidies, the Children’s Health Insurance Program (CHIP), and Medicaid drove the reduced figure, the CBO said in an online post.
The total projected cost of ACA provisions to the federal government over the next 9 years is $1.2 billion, 11% less than CBO and the Joint Committee on Taxation estimated in January.
However, CBO predicts the annual budget deficit will rise to $486 billion in fiscal 2015, slightly higher than last year’s shortfall. The latest deficit estimate for 2015 is $18 billion higher than CBO had originally projected.
CBO said the estimated rise stems primarily from a projected rise in spending for student loans, Medicaid, and Medicare. The deficit for 2015 represents a slightly lower percentage of gross domestic product of 2.7%, compared with 2.8% last year.
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