Fewer consumers to obtain coverage under reform

Insurers might not see quite as large an influx of new consumers as previously predicted under the health reform law, according to the latest budget outlook from the Congressional Budget Office.

The CBO projected that fewer people--about 27 million consumers--will get insurance by 2017, down from its previous estimate of up to 34 million new consumers.

The non-partisan group's budget outlook also revised several other past projections that might not sit well with insurers, including that insurance options will be more limited, fewer people will obtain health coverage and health insurance exchanges probably won't be ready to launch this year.

The fiscal cliff deal, which Congress reached in January, is at the heart of many of the CBO's revisions. The agreement includes tax changes that will cause about 8 million people who would have obtained a health plan through their employer to lose that coverage, NBC News reported.

By preserving low tax rates for people who earn less than $450,000, the fiscal cliff deal eliminated some of the tax breaks employers would have received when they offer insurance to their workers. The CBO, therefore, now predicts employers will opt to let their workers buy publicly-subsidized health policies through health insurance exchanges soon, reported The Washington Post's Wonkblog.

However, the CBO isn't sure the exchanges will provide enough insurance options and Medicaid programs won't be ready to enroll new consumers, according to the budget outlook.

But Dan Mendelson, CEO of Avalere Health, said insurers don't need to panic just yet. The CBO is recognizing how challenging it will be to implement reform law, but it still hasn't predicted a complete disaster.

"They are starting to adjust to reality, and reality is you have to work really hard to get people to sign up" for exchanges, Mendelson told the National Journal . "While I don't think they are predicting a failure of the systems, they are acknowledging the realities that people do not sign up instantaneously."

To learn more:
- here's the CBO budget outlook (.pdf)
- read the NBC News article
- see the Washington Post Wonkblog article
- check out the National Journal article