President Obama’s healthcare law will cost about 20% less over the next decade than originally projected, the Congressional Budget Office reported Monday, in part because lower-than-expected healthcare inflation has led to smaller premiums.

So far, the number of uninsured Americans has dropped by about 12 million. By the end of 2016, 24 million fewer Americans will lack insurance, the nonpartisan budget office forecast.

Excluding immigrants in the country illegally, who are not eligible for coverage under the law, only about 8% of Americans under age 65 will lack insurance by the time Obama leaves office, the budget office’s latest report on the law estimates.

Of the Americans who will remain uninsured once enrollment has fully ramped up, the budget office estimates that about 30% will be people in the U.S. without legal authorization. An additional 10% will be people who are too poor to buy insurance on the exchanges, but who live in states that have not expanded Medicaid. The remaining 60% will be people who choose to not buy insurance or enroll in Medicaid.


Those forecasts assume that Obamacare remains in its current state for the rest of the president’s tenure, a projection that could be significantly upset by the Supreme Court this year. The high court is set to rule by June on a challenge to the law’s grant of subsidies to insurance consumers in many states.

The budget office, noting that its estimates of the law’s costs have dropped repeatedly, said the smaller price tag was “attributable to many factors.” Two of the largest were “the slowdown in the growth of healthcare costs” and the Supreme Court’s decision in 2012 to allow states to opt out of expanding the Medicaid program for the poor.

About half the states have so far declined to expand Medicaid to all impoverished adults, as the law allows. Because the federal government pays the cost of that expansion, the states that have declined have held down federal spending. Several of those states are reconsidering, however, and the budget office projects that additional states will decide to expand Medicaid over the next several years.

Overall, the budget office projects that insuring people under Obamacare will cost roughly $1.35 trillion over the next decade. Most of that money goes to subsidizing the cost of insurance for working-class and middle-class families and to the expanded Medicaid program.


The report suggests that projected price tag could drop again later this year. An estimate of future premiums, currently in its “early stages,” seems to suggest lower costs, the report said.

For this year, the budget office estimates that about 12 million Americans will buy insurance on the new online markets, known as exchanges, which the law created. The total on the exchanges will rise to 21 million in 2016, the report forecast.

Enrollment in Medicaid and the related Children’s Health Insurance Program is higher by 8 million as a result of the new law, the budget office estimates, and that figure is expected to rise to 16 million by 2016.

Those increases in coverage will be partially offset by a reduction in the number of Americans receiving coverage at work, which the budget office expects to see in future years, as well as some smaller shifts in the insurance market. The budget office expects that between 9 million and 10 million fewer Americans will have coverage through their workplaces by 2018.


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