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Health care cost increases slow to lowest level in decades

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Yesterday, at a White House press conference, President Barack Obama announced “…health care spending has risen more slowly than at any time in the past 50 years.” After decades of double-digit increases for individual policyholders, and nearly 8 percent annual increases for employment-based plans, a Congressional Budget Office (CBO) report is projecting future health insurance premium increases for Marketplace plans of around 6 percent. The same report estimates that Silver level plans offered in the Health Insurance Marketplace will cost 15 percent less than earlier projected.

The national average cost of a Silver level plan, the second-lowest cost plan in the exchange, is about $3,800 for 2014. The CBO projects this will rise to about $3,900 in 2015. A steeper rise, to $4,400, is expected for 2016 plans, although this is less than the $5,200 projection made by the CBO in November 2009, before the Affordable Care Act became law.

Medicare costs per person have stopped growing, the President reports, and the Medicare trust fund has been extended another 10 years. The projected cost of ACA provisions related to health insurance coverage has decreased by $100 billion for fiscal years 2014 through 2019. This decrease in costs is largely attributed to lower-than-expected premiums, therefore lower subsidy payments, and a reduction in Medicaid spending.

The first enrollment period for the healthcare exchanges created under the ACA closed March 31. The Administration reports that eight million have enrolled in plans through the Obamacare exchanges. An additional five million purchased health insurance outside of the exchanges, but are still in the same risk pool as individuals that enrolled through the Marketplace. Three million Americans became newly eligible for Medicaid in states that opted to expand their Medicaid program and another three million young adults have health insurance coverage under the provision that allows children younger than 26 to stay on their parents’ policies.

President Obama had harsh words for his political opponents that have voted more than 50 times to repeal the ACA. “…the repeal debate is, and should be, over,” the President said. “The Affordable Care Act is working. And I know the American people don’t want us spending the next two and a half years refighting the settled political battles of the last five years.” Obama urged his opponents to focus instead on economic issues such as job creation and raising the minimum wage.