WASHINGTON, D.C.–(ENEWSPF)–January 28, 2011. A new report by the Department of Health and Human Services (HHS) confirms that, under the new health care reform law, individual families will save on health insurance premiums and out-of-pocket costs – up to $14,900 annually – and tax credits could save small businesses up to $6 billion over two years. U.S. Senator Dick Durbin (D-IL) today cautioned that a repeal of the Affordable Care Act would mean higher health care costs for Illinois consumers.
“Today’s report confirms what many of us in Congress have been saying for months – the Affordable Care Act will save Americans money on their health insurance,” said Durbin. “The new law is already making a difference and will soon allow even more families and small businesses to take advantage of thousands of dollars in savings. Repealing health care reform would deny millions in Illinois the critical new benefits and protections against insurance industry abuses that they deserve.”
These savings are in sharp contrast to the rising insurance costs families and businesses have experienced over the previous decade. From 1999 to 2009 premiums more than doubled (from $5,736 to $13,375) for the average family that gets insurance through an employer. The report finds that under the Affordable Care Act:
· Middle-class families purchasing private insurance in the new State-based Health Insurance Exchanges could save as much as $2,300 per year in 2014; and
· Tax credits provided by the Affordable Care Act will lead to even greater savings. For example, in 2014, a family of four with an income of $33,525 could save as much as $14,900 per year since they will also qualify for tax credits and reduced cost sharing.
The high cost of health care made it difficult for many small businesses to offer insurance to their workers. Small businesses face particular challenges from rising rates as they pay on average 18% more for the same health plan as would a large business. The percentage of small employers offering health insurance dropped from 65% to 59% between 1999 and 2009. The report finds that under the Affordable Care Act:
• In 2014, small businesses, on average, could save up to $350 per family policy and many may be eligible for tax credits of up to 50% of their premiums;
• The tax credits that are already available to small businesses cover 35% of their premiums. For example, a firm with 10 workers who earn an average of $20,000 annually could currently receive credits of $35,000 annually. These tax credits could save small businesses $6 billion in 2010 and 2011; and
• All businesses will likely see lower premiums of $2,000 per family by 2019, which could generate millions of dollars in savings.
The report also emphasizes the important changes coming in the future. Starting in 2014, State-based Exchanges will make it easier for people to compare benefits and services and enable individuals and small businesses to pool together and use their market strength to buy coverage at a lower cost.
The report can be found at: http://www.healthcare.gov/center/reports/premiums01282011a.pdf