Obamacare Gets Some Good News From California

A few days ago I mentioned some good news out of Oregon: competition among health insurers was forcing down the price of coverage on the state’s new Obamacare exchanges. Yesterday we got more good news from a much bigger state: mine. Wonkbook has the deets:

In 2009, the Congressional Budget Office predicted that a medium-level “silver” plan — which covers 70 percent of a beneficiary’s expected health costs — on the California health exchange would cost $5,200 annually. More recently, a report from the consulting firm Milliman predicted it would carry a $450 monthly premium. Yesterday, we got the real numbers. And they’re lower than anyone thought.

As always, Sarah Kliff has the details. The California exchange will have 13 insurance options, and the heavy competition appears to be driving down prices. The most affordable silver-level plan is charging $276-a-month. The second-most affordable plan is charging $294. And all this is before subsidies. Someone making twice the poverty line, say, will only pay $104-a-month.

Sparer plans are even cheaper. A young person buying the cheapest “bronze”-level plan will pay $172 — and that, again, is before any subsidies.

For some people—mostly young people with good incomes—individual rates may go up from what they’re paying now, though that depends on what kind of coverage they select. The table on the right shows a few selected rates for a silver plan in California’s biggest cities. (Tax credits will lower these rates further for residents with moderate incomes.)

Nonetheless, competition seems to be doing its job on the exchanges and this is generally good news. Healthcare still costs too much, but if these early results hold up, Obamacare’s structure seems to be doing a pretty good job at its core mission of controlling prices.