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Affordable Care Act Costing Less Than Expected

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The Congressional Budget Office said the Affordable Care Act is going to cost the federal government less than previously anticipated.

They originally expected it to cost about $41 billion.

The CBO says the affordable care act will cost the federal government five billion dollars less than it anticipated a year ago.

Montana State University Assistant Professor of Economics Eric Belasco said that's because the CBO expected health insurance companies to offer employer type plans on the federal exchange.  That's where many people are pooled into the same insurance plan.

"The costs are lower because the networks are a bit smaller so there is to be some cost savings to be had in there," said Belasco.

The Obama Administration said more than 7.5 million people purchased health insurance on the federal exchange,

The Department Of Health and Human Services said just over a million people between 18 and 37 bought insurance on the exchange.

Belasco said that could also be why plans are lower this year.

"You saw a big push to get younger people to sign up for insurance because they are relatively low cost for insurance companies to insure, so the more young people are in the pool, the lower it costs for everyone," said Belasco.

Even though the costs are lower the first year the Affordable Care Act is fully implemented, Belasco said he expects that to change.

"We should expect to see these rates increase over time just as health care costs are expected to increase over the next 20 years," said Belasco.

He said the insurance companies will ultimately decide the cost to the people and the government.

"Moving forward, what are the plans going to look like?" said Belasco. "Are they going to look the same, a lot of people think they are going to start to look like the employer based."

The CBO estimates 42 million people aren't insured this year because they chose not to get health insurance.

The CBO expects the price tag for the affordable care act for the next ten years to be $1.4 trillion, $104 billion less than previously expected.

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