California Insurance Commissioner Dave Jones joined U.S. Health and Human Services Secretary Kathleen Sebelius this morning on a teleconference to roll out a new HHS report showing how much families and businesses can save on health insurance premiums and out-of-pocket costs under the Patient Protection and Affordable Care Act, the health care reforms signed into law last year.
The report says that with the creation by 2014 of state health exchanges, marketplaces where individuals without coverage through their employers can shop for insurance at competitive rates:
Middle-class families purchasing private insurance in the new State-based Health Insurance Exchanges could save as much as $2,300 per year in 2014.
Tax credits provided by the Affordable Care Act will lead to even greater savings. For example, in 2014, a family of four with an income of $33,525 could save as much as $14,900 per year since they will also qualify for tax credits and reduced cost sharing.
In 2014, small businesses, on average, could save up to $350 per family policy and many may be eligible for tax credits of up to 50 percent of their premiums.
The tax credits are already available to small businesses, and cover 35 percent of their premiums. For example, a firm with 10 workers who earn an average of $20,000 annually could currently receive credits of $35,000 annually. These tax credits could save small businesses $6 billion in 2010 and 2011.
All businesses will likely see lower premiums of $2,000 per family by 2019, which could generate millions of dollars in savings.
“If we repeal the law as some in congress have proposed, families and small business owners will pay the price,” Sebelius told reporters on the conference call, saying the nation mustn’t return to the days when rising costs put heavier burdens on family budgets and business balance sheets.
Sebelius said some insurers are already reporting increased enrollment as they inform their small business clients of the tax credits made available under the new law.
Jones said the report underscores the importance of moving forward with implementing the Affordable Care Act, which he called “one of the most significant legislative accomplishments of the last 50 years.” He noted that California is the first state to pass legislation under the Act to establish its health care exchange.
Jones also noted the new law requires that children with pre-existing conditions no longer can be denied coverage; he noted that California parents with uninsured children should enroll them before March 1 to take advantage of a lower open-enrollment rate.
Jones earlier this week had announced that the state Office of Administrative Law approved his request for an emergency regulation giving him authority to enforce the 80 percent Medical Loss Ratio in the individual market established under the Affordable Care Act – meaning California’s individual insurers must now spend at least 80 percent of their premium revenues on medical services rather than profits, marketing and overhead.
UPDATED @ 12:59 P.M.: U.S. Senator Orrin Hatch, R-Utah, the ranking member on the Senate Finance Committee, said this:
“This report is as deeply flawed as the $2.6 trillion health law that the American people continue to oppose. The facts from the government’s own budget experts are clear. According to the Administration’s actuary, health care costs for the nation will rise faster under this new law, despite the White House’s claim. Every American remembers President Obama’s pledge to reduce health costs by $2,500 for families, but the non-partisan Congressional Budget Office has found the President’s health care law will increase premiums by $2,100 for families purchasing coverage on their own. House Republicans have listened to the people and acted to repeal this disastrous, budget-busting health law. Now it’s time for the Senate to act as well.”
But, from Rep. George Miller, D-Martinez, the ranking member on the House Committee on Education and the Workforce:
“Today’s report confirms that the increased competition and consumer protections in the reform law will lower health insurance premiums for millions of American families and businesses. At a time when budgets are already stretched thin by rising costs, this is one more example of how families and businesses are benefiting from the health care law and can ill afford the reckless Republican effort to repeal it.”