World News

Declining Health Care Costs Will Lower US Budget Deficit

The U.S. government's budget deficit is expected to fall by nearly one-third this year, with much of the decline attributed, in part, to lower health care subsidies following the implementation of the Affordable Care Act.

The Congressional Budget Office (CBO) said in a report Monday that the budget deficit will be $492 billion in 2014, or 2.8 percent of GDP (Gross Domestic Product), compared to 2013, when the deficit stood at about $680 billion or 4.1 percent of GDP.

The CBO credited part of the decline to the health care law, including coverage provisions, curbs to Medicare and penalties to individuals and businesses that forego insurance.

The CBO said this would be the fifth consecutive year for a decline in the deficit.

It said, however, that after 2015 budget shortfalls will rise because of an aging population, increasing health care costs and increased interest on federal debts.

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