The decision to make the Medicaid expansion optional has the effect of leav- ing low-income people with few options in states that did not expand. People with incomes at and somewhat above 100 percent of the FPL are eligible for the largest ACA subsidies. However, those below 100 percent of the FPL are not eligible for Medicaid and are not eligible for subsidies. They can buy exchange coverage, but only at the full, nonsubsidized premium.
Affordable Care Act Spending and Revenue Projections
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Low-Income People in States That Do Not Expand
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At the time the legislation was enacted, the CBO projected that the total ten-year cost of the program to the federal government would be approximately $935 billion. Revenues (including reductions in spending in other programs) were estimated at $1,078 billion, for a net reduction in the federal deficit of $143 billion. Let us examine the items in more detail.
Spending The costs of the subsidies provided to individuals through the exchanges together with the initial costs of setting up the exchanges were estimated to be the largest expenses: $464 billion.
The Medicaid expansion to cover most adults between 19 and 64 was estimated to be nearly as costly, $434 billion. This estimate was obviously too large, given the Supreme Court decision and the number of states that did not expand.
The small-employer credit of $37 billion relates to the short-term tax credits that employers with fewer than 50 workers can receive for providing coverage. This amount is small, reflecting both the short duration of the subsidy and the expectation that few small employers will use it.