Good news from the Congressional Budget Office: Obamacare isn't going to cost as much as expected because of lower premiums. Or wait, consumers are about to start paying much more for their insurance because of the law—at least according to the CBO. What's the story? Can they both be true?
In fact, they are both accurate.
Yes, premiums are rising: Between 2016 and 2018, CBO expects that the benchmark premium—the average cost of a "silver" plan on insurance exchanges—will increase 8.5 percent per annum. There are two reasons for that: First, the government will stop backing insurance programs that have especially high costs, and second, it seems as if many of the new insurance programs created under the law didn't pay providers as much as employer-based insurance. CBO thinks that's unsustainable, and that those plans will have to jack up premiums to bring their provider payments up to par. (The full CBO report is here.)
But, premiums are rising more slowly than projected: Premiums always rise—the question is whether the rate can be controlled. Most people don't actually get their insurance through the Affordable Care Act, and premiums overall are also growing slower than expected. No one is totally sure why—Obamacare's champions say it's cost-cutting measures in the law, skeptics say it's just a result of the recession, and there are a few other theories as well—but the clear result is that costs aren't rising as fast, at least for now.