Nation

Report projects health care costs to dip slightly

WASHINGTON — The Affordable Care Act’s health insurance subsidies will cost a little less than previously estimated, according to a report released Monday.

The Congressional Budget Office predicts that health insurance subsidies under the federal program will total a little more than $1 trillion over the next 10 years, instead of almost $1.2 trillion initially expected.

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The budget office said the 8 percent cut results largely from tighter cost controls by insurance companies offering plans on health care exchanges. Generally speaking, the plans offered on the exchanges pay health care providers less and have tighter management of patients’ treatment options, and that means lower premiums and taxpayer subsidies.

Overall, the report is positive news for the White House and its Democratic allies on Capitol Hill, who are under assault politically after the law’s troubled rollout.

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Medicaid adds almost $800 billion in costs over the decade. Overall, however, the law reduces the deficit because of tax increases, penalties paid by people and businesses that forgo health insurance, and curbs on Medicare.

The report also predicts that premiums won’t skyrocket next year as some fear, but does say that premiums will rise moderately from an average of $3,800 in 2014 to an average of $3,900 for 2015, which would be good news for the Obama administration if the projections panned out.

The new estimates are contributing to a slightly improved overall deficit picture.

Associated Press

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