The Congressional Budget Office now estimates that roughly four million fewer Americans will likely gain insurance coverage in 2014 and three million fewer in 2022 as a result of the Supreme Court ruling. Most of the drop in coverage will be the result of states exercising their option to not expand Medicaid.

In previous estimates of the cost and impact of the Affordable Care Act, the CBO assumed all states would effectively have no option whether to take part in the Medicaid expansion.   But now that the Supreme Court has ruled the original scheme is unconstitutionally coercive, the CBO has created new projections assuming at least some states will not take part in the expansion at first. Given the number of Republican governors publicly claiming they will reject the Medicaid expansion, the CBO is probably correct to assume at least some would stay true to their word.

The CBO assumes that in 2022 roughly six million fewer people will be enrolled in Medicaid primarily as a result of the Court’s decision. Among those who would have been eligible for the expansion, roughly two-third would have incomes below the poverty line and would be effectively out of luck (they live in states that do not cover that segment under the current program).  A third will make between 100-138% of the federal poverty level. These people would technically qualify for exchange subsidies but fewer of them will sign up because insurance on the exchange would be more expensive for them than Medicaid would have been. On a per person basis, covering this group of low income people via the exchange will be significantly more costly for them personally and for the federal government. From the CBO Analysis:

For the average person who does not enroll in Medicaid as a result of the Court’s decision and enrolls in an exchange instead, estimated federal spending will rise by roughly $3,000 in 2022—the difference between estimated additional exchange subsidies of about $9,000 and estimated Medicaid savings of roughly $6,000.

[...]

With those factors taken into account, the federal costs for each additional person enrolling in the exchanges (most of whom would have enrolled in Medicaid under CBO and JCT’s prior estimate) will be approximately $9,000 in 2022, on average. That amount is calculated by dividing the total increase in federal spending in the exchanges in 2022 ($28 billion) by the number of additional enrollees (3 million people). The extra exchange costs per person are larger than the decrease in Medicaid costs per person primarily because, in CBO’s and JCT’s estimation, private health insurance plans in the exchanges will pay providers at higher rates than Medicaid pays and will have higher administrative costs than Medicaid, although there are other, partially offsetting, factors as well.

While the per capita cost for each new person covered would go up significantly, the CBO projects the ACA will cost roughly $84 billion less over ten years, since the law would cover far fewer people on net. All these estimated are based on trying to guess what policy decision states will make in the future, so the estimates are subject to a large degree uncertainty.