A new report from the Department of Health and Human Services (HHS) shows how much families and businesses can save on health insurance premiums and out-of-pocket costs under the Affordable Care Act in 2014–each year, a low-income family of four could save up to $14,900 and businesses will benefit from the savings and tax credits in the new law.

The report finds that, compared to what they would have paid without the law:

  • 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.
  • 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.
  • 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 are already available to small businesses, and 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.
  • All businesses will likely see lower premiums of $2,000 per family by 2019, which could generate millions of dollars in savings.

These savings are in contrast with rising insurance costs families and businesses experienced in the previous decade: from 1999 to 2009, premiums more than doubled, rising by more than $7,500 for the average family that received insurance through an employer. The percentage of small employers offering health insurance dropped from 65 to 59% between 1999 and 2009, the agency said.

The report outlines several provisions of the Affordable Care Act that HHS has already begun to implement, which will help create savings, including provisions to increase transparency in the health insurance marketplace.

In 2011, most health insurance companies will be required to spend at least 80% of premium dollars on health care and quality improvements, rather than overhead and administrative costs. States have received new resources to improve review of proposed health insurance premium rate increases.

Many small businesses are already eligible for tax credits that cover up to 35% of insurance costs for their employees. And more than 5,000 sponsors have been accepted into the Early Retiree Reinsurance Program, which is designed to provide financial relief to help early retirees and their families continue to have quality, affordable health coverage.

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.

[Source: [removed]HHS[/removed]]