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How much does Obamacare cost the government?

As a whole, the law actually saves money.

piggy bank

For the federal government, Obamacare’s hefty tax increases and Medicare cuts means the law, as a whole, actually saves money — at least according to the Congressional Budget Office.

The Congressional Budget Office estimated in 2012 that Obamacare will save $109 billion over the next decade. And in more recent reports, the non-partisan agency has credited the law with helping drive down the government’s deficit because its insurance expansion programs have cost less than initially expected.

Obamacare has come in way under budget

Congressional Budget Office

Make no mistake: Obamacare spends a lot of money on its tax credits and Medicaid expansion. It recoups some, but not all, of that new spending with hundreds of billions of dollars in Medicare cuts, which reduce federal health spending. (The bulk of the remainder is made up with tax increases, but they’re irrelevant for this calculation.) But back when the law was passing, Republicans argued up, down, and sideways that the Congressional Budget Office was sharply underestimating the amount of money Obamacare spends.

The opposite, however, has turned out to be true: CBO keeps revising down the estimated cost of Obamacare’s insurance expansion.

Twice in the past year, the Congressional Budget Office has revised downward projected spending on the Affordable Care Act. In fact, the federal government is expected to spend less on health care now than it predicted in early 2010 — and those predictions didn’t include any spending from Obamacare!

That isn’t just about Obamacare — projections on what we’ll spend on Medicare and Medicaid, the two other big federal health-care programs, went down, too. But it is pretty remarkable that health-care spending is now expected to be lower than projections made before Congress passed a massive health insurance expansion.

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