The Congressional Budget Office has some good news for entrepreneurs and others planning to buy health insurance coverage through insurance marketplaces, or exchanges. Premiums are going to be less expensive than previously thought, but there's a caveat: Those premiums are still projected to rise steadily after 2016.
The bipartisan CBO says health insurance premiums in 2016 are expected to be about 15 percent less than it previously anticipated. In November, 2009, the CBO had estimated that an individual "silver" policy--the second-least-expensive option on the exchanges--would cost $5,200 a year in 2016. In a report issued Monday, the CBO now predicts that same policy will cost $4,400 in 2016.
That's still well above the current cost of that same policy, which the CBO says currently averages about $3,800 nationwide.
The CBO anticipates that the price of a health insurance policy will actually drop a bit in the short term, partly because people buying policies in 2015 are expected to be healthier than those enrolling in 2014.
The current prices for silver policies are also lower than originally anticipated. That's good news for individuals buying the policies, but as usual, nothing comes for free. Instead, for plans being offered through 2014, health insurance companies have negotiated lower payment rates for doctors and other health care providers. In general, insurance plans bought through exchanges are also managing patients' use of healthcare more tightly and providing access to smaller provider networks than employer-sponsored plans, says the CBO.
In general, the CBO doesn't think this situation is sustainable. While the CBO anticipates that exchange-purchased plans will continue to offer more limited networks of doctors, smaller payments to health care providers, and more tightly regulated use of healthcare, over time, the CBO expects these plans to more closely approximate the coverage available through employer-sponsored plans.
After 2016, the CBO says that health insurance premiums will rise about six percent a year. As a comparison, premiums for family coverage rose 9.4 percent between 2010 and 2011, according to research from the Kaiser Family Foundation. By 2024, the CBO says an individual silver plan will cost about $6,900 a year.
Here's entrepreneur, chef, and restaurateur Mario Batali talking about his business and the Affordable Care Act: