Obamacare gets backing from Supreme Court

The mathematics – and thus the politics – of America's controversial healthcare act just got a little better for President Barack Obama after an independent forecasting office on Capitol Hill said it will end up costing the federal government $84bn less over the next 11 years than originally thought.

The change is one of the consequences of last month's Supreme Court ruling, which as well as finding that the reform law is constitutional also gave individual states the ability to opt out of an intended large-scale expansion of the federal Medicaid programme to give insurance coverage to more people.

The downside for Democrats is that about 3 million fewer people will get coverage. The upside is the whole enterprise suddenly becoming cheaper.

"This confirms what we've been saying all along – the Affordable Care Act saves lots of money," Harry Reid, the Senate Majority Leader, said after the release of the report compiled by the non-partisan Congressional Budget Office (CBO). It pared down the overall estimated cost of the Act over the next ten years to $1.168 trillion, compared to an earlier estimate of $1.252 trillion. All of it will be offset by taxes and spending cuts.

There is more potentially good news for the White House. While the President's challenger for the White House, Mitt Romney, is vowing at every turn to dismantle the healthcare act, also known as Obamacare, on day one if he is elected, the CBO says repealing it would not, as the Republicans contend, save federal dollars.

On the contrary, the report finds, undoing the law now would add $109bn to the deficit over the next decade.

The report is a reminder that Obamacare barely achieves universal coverage in America. As it was, the Act was likely to extend coverage to only about 30 million of the 50 million Americans without insurance.

If, as the CBO says, the Court's decision to allow states to opt out of the Medicaid expansion – among a handful likely to do so are Florida and Texas – means an additional 3 million falling through the cracks, its reach will be even less impressive.

Yet, the Obamacare is set to become an important flashpoint in the presidential race and anything that says it will reduce the deficit and not worsen it makes the Republican case for repeal that much harder to sell.

"The Affordable Care Act is controlling the growth of health care costs and contributing to deficit reduction," House Minority Whip Steny Hoyer, a Maryland Democrat, said upon the report's release.