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Affordable Care Act Saves Consumers $3.9 Billion on Insurance Premiums

Today, HHS announced that American consumers saved $3.9 billion on insurance premiums in 2012 as a result of the Affordable Care Act. From the release:

Today, the Department of Health and Human Services (HHS) announced that nationwide, 77.8 million consumers saved $3.4 billion up front on their premiums as insurance companies operated more efficiently.  Additionally, consumers nationwide will save $500 million in rebates, with 8.5 million enrollees due to receive an average rebate of around $100 per family.

The Hill:

Consumers saved nearly $4 billion on their insurance premiums last year because of new rules in President Obama’s healthcare law, the administration said Thursday.

The Health and Human Services Department (HHS) said consumers saved $3.9 billion last year from new rules that govern insurance companies’ spending. The rules have saved consumers roughly $5 billion over the past two years, HHS said.

The HHS announcement comes on the heels of an analysis of proposed health insurance premiums by the nonpartisan Avalere Health firm in statewide individual marketplaces which concluded health care plans will cost less than CBO predicted. From ThinkProgress:

Avalere Health looked at insurers’ proposed rates for Obamacare’s statewide insurance marketplaces in nine different states, and found that premiums for a 40 year old non-smoker on a mid-level health plan will cost anywhere from a low of $205 (in one Oregon region) to a high of $413 (in one Vermont region). That high-end price is actually lower than what the Congressional Budget Office (CBO) predicted the average mid-level plan cost would be in 2016.

“The initial data suggest that competition in exchanges is working to lower premiums, which will benefit nonsubsidized enrollees and the federal government,” said Caroline Pearson, vice president at Avalere Health, in an interview with The Hill…

There is considerable early evidence that the reform law’s marketplaces are working exactly as intended by forcing insurers to compete against each other. Comprehensive plans proposed in California, Vermont, Washington, and Oregon are largely affordable, and two Oregon insurance companies even lowered their proposed prices once they realized that their initial rates were too high to be competitive on the state’s marketplace.

 

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