Dive Brief:
- The Congressional Budget Office (CBO) has released a report examining the impacts of federal policy, most particularly the Affordable Care Act (ACA), on private health insurance premiums.
- The report did not come from any original research, but used limited available empirical work and economic theory to look at what has occured so far under the ACA and to predict its effects, notes a new Health Affairs blog.
- The report also includes a section discussing costs to insurers and how insurers can work to contain their costs and their premium growth.
Dive Insight:
The report indicates a mix of pros and cons for ACA impacts on premiums, but offers encouraging predictions regarding future premium increases.
On one hand, it concludes some of the most-challenged provisions of the healthcare law are actually helping to keep premiums down, such as the the individual mandate, which brings in healthy enrollees, and premium tax credits. Further, it suggests the essential health benefit requirement is not a major cost driver.
On the other hand, the report finds the regulation most pushing premiums upward is the ACA’s increase to the minimum actuarial value of nongroup plans, Health Affairs author Tim Jost notes the finding is "ironic given the criticism that the ACA has received for increasing cost sharing."
Perhaps most notably, the CBO projects only modest premium increases going forward and discounts dire warnings of some ACA opponents that health insurance markets are locked into a trend toward ever-increasing and out-of-reach premiums.