The state of California released a rate filing yesterday for insurance plans that will be offered on the state exchange under Obamacare and prices are expected to be much lower than the CBO previously projected.
The Congressional Budget Office predicted in 2009 that premiums for a middle-of-the-road exchange plan would come to about $5,200 per year.
Other states have seen their rates track relatively close to that figure, but California’s plans came in substantially lower — about $3,600 per year before subsidies.
Some young people in the state might not have to pay a premium at all — federal subsidies will be enough to cover the entire cost of one of the cheapest policies available.
Why are California’s premiums expected to be so much lower than previous estimates? Because under California’s exchange system the state can negotiate directly with insurers for lower premiums.
Isn’t Big Government grand?