WASHINGTON - Premiums for some medical plans to be sold to the uninsured next year will be 18 percent less costly than government analysts expected under President Barack Obama's signature health-care law, his administration reported Thursday.
A benchmark measure of the Affordable Care Act's promise shows monthly rates for "silver" plans will average $321 in 11 states examined in a report from the Health and Human Services Department. Congressional Budget Office estimates from last year saw silver premium rates averaging $392, HHS said.
Obama touted the findings at a White House event designed to promote the benefits of a law that his Republican opponents in Congress are trying to derail before the core provisions take hold Jan. 1. The report shows that only one state, Vermont, reported premiums for silver plans higher than the CBO estimate - $400. New Mexico had the cheapest at $226.
"They're trying to get the message out that health reform is a good deal," Joseph Antos, a health economist at the American Enterprise Institute who advises the CBO, said in a phone interview. "They're comparing it not to what people actually pay today, or what people expect to pay, but rather frankly a guess from the Congressional Budget Office from last year that really doesn't represent a good indicator of whether people are happy with their options or not."
The White House press secretary, Jay Carney, cited a report from New York state officials Wednesday that forecast health insurance premiums will drop about 50 percent on average for consumers who buy new plans through a state-run marketplace created under the health-care law.
"This is in line with what we've seen in other states, like California and Oregon," Carney said. "Competition and transparency in the marketplaces, plus the hard effort by those committed to making the law work, are leading to affordable, new, and better choices for families."
Obama, citing slower growth of health-care costs and rebates some consumers have received from their insurers, said in his speech Thursday that the law has proven effective at delivering "more choices, better benefits, a check on rising costs and higher quality health care."
The health-care law seeks to expand coverage to most of the nation's 50 million uninsured people. About 7 million people are expected to enroll in exchange plans next year, rising to 25 million by 2018, according to the CBO. The law also encourages states to expand their Medicaid programs for the poor to cover people earning close to poverty-level wages.
Many people who are uninsured probably expect coverage on the exchanges "to be such a good deal that you can't pass it up," Antos said. While that should be true for people with extremely low incomes, once you get above about 200 percent of poverty "that's absolutely not going to be true," he said.
The HHS report examines the price of silver plans because they determine the amount of subsidies people will receive when they shop in the exchanges. There will be four levels of coverage available through the exchanges - bronze, silver, gold and platinum. Bronze plans, covering 60 percent of the cost of care, will be the cheapest. Platinum covers 90 percent of care.
For the president's plan to succeed, almost 40 percent of the 7 million people targeted in the first year need to be young, healthy adults to balance the cost of insuring older people at higher risk of illness.
The cheapest bronze plan available to a 25-year-old in Los Angeles County's 90021 zip code next year will be $152 a month, and subsidies would reduce the premium for many purchasers. That same person today could buy a basic health plan from Kaiser Permanente for as little as $88, according to the online broker EHealth Inc. That policy doesn't cover all of the benefits that would be required under the health law, and anyone with a health condition would likely be quoted a higher price or perhaps denied coverage altogether.
The health law keeps insurers from denying coverage and also requires them to charge the same rates to men and women starting next year. It also prohibits them from charging older people more than three times the cost of the cheapest plan for young adults. People earning as much as four times higher than the poverty level - meaning an income of about $94,000 for a family of four this year - will be eligible for subsidies that will further reduce the plans' cost beyond the advertised prices.