The American Health Policy Institute recently released a study which found that under the Affordable Care Act, many entrepreneurs foresee their employee benefit expenditures becoming more substantial. And while most financial assessments forecast similar price hikes, they may not be as costly as originally anticipated, according to a new report from the Congressional Budget Office.
Released on April 14, the nonpartisan CBO noted that under the ACA, health insurance subsidies will increase by approximately $1 trillion over the next 10 years, The Associated Press reported. It's original projection was a $1.2 trillion uptick in costs.
The reason for the revision, according to the CBO, is due to insurance companies participating in the exchanges offering fewer benefits that those purchased in the private market, the AP noted. This should translate into lower-than-expected costs, but they are still expected to increase.
For example, premiums will likely average $3,800 this year, but by 2015, it could go up to $3,500. At the same time, though, subsidies for health coverage under the ACA are also expected to rise. By 2024, for instance, the average exchange subsidy could be nearly $7,200.
When the ACA was signed into law, supporters of the legislation said that premiums would drop by an average of $2,500 per year. According to the public policy think tank the Heritage Foundation, in 19 states, premiums for a family of four are expected to increase by more than 10 percent, including Georgia, Texas, Arizona, Alaska, Michigan, Wisconsin, North Dakota and South Dakota, to name a few. The right-leaning research organization also found that premiums could double for 27-year-olds in 11 states.
