Blog Post

Obama: ACA premiums will be lower than expected

July 18, 2013

    Juliette Mullin, Editor

    Our news team watched this morning as President Obama announced that premiums for health plans sold in the Affordable Care Act's (ACA) health insurance exchanges will be less costly than government analysts previously expected. (See Alex Wayne and Lisa Lerer’s good preview for Bloomberg for more background.)

    The speech was delivered at the White House, where Obama discussed an HHS report released this morning outlining the latest premium estimates and defended the law against Republican critiques. And it was Obama's first speech since he announced that the ACA's employer mandate will be delayed by a year, which has given House Republicans an opening to criticize the law and its implementation.

    Obama touted a key finding in the report: that premiums for "silver" plans available next year in the exchanges will be about 18% lower than the Congressional Budget Office assessed last year in its estimate of the overall cost of the law. The report examined premiums in 11 states and estimated that they would be $321, compared with CBO's estimate of $392.

    In addition, Obama discussed the impact of an ACA provision that requires health insurers to spent at least 80% of revenue from premiums on health care rather than administrative expenses. "Last year, millions of Americans opened letters from their insurance companies, but instead of the usual dread that comes with getting a bill, they were pleasantly surprised with a check," Obama said.

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