Average premiums on the health insurance exchanges are coming in slightly lower than what the Congressional Budget Office predicted back in 2012. A new report for HHS compares these predictions from over a year ago to the premiums now being submitted by insurance companies in several states. From the HHS:
This is modest good news for the federal budget and a pretty good vindication of the CBO’s projections.
Lower premiums of the exchanges means the Affordable Care Act will require smaller premium support subsidies and that will modestly reduce federal spending.
In retrospect, the CBO’s projections from 2012 appear to have been fairly accurate. Part of the reason they probably ended up slightly higher is that health care spending as a whole has been slower than the average of the past few years. Most of this slowdown in health care spending has been the result of slow growth in the entire economy.
The real test, though, won’t come until 2015 or later. Right now the premiums companies are submitting are still based only on predictions about who they think may use the new exchanges. By 2015, companies will be able to see how many people actually did sign up.