Obamacare to slash premiums in New York. Was Obama right all along?

One of the centerpieces of Obamacare bloomed Wednesday when New York Gov. Andrew Cuomo (D) announced the new state-run insurance exchange would cut costs by more than half. 

State regulators have just approved the premiums the exchange will offer, and, on average, they represent a 53 percent reduction of previous individual rates. Any uninsured person or a small business with fewer than 50 employees will be able to purchase this insurance through New York’s Health Benefit Exchange, an online marketplace of 17 companies offering four grades of insurance – as mandated by President Obama’s 2010 Affordable Care Act. 

Governor Cuomo noted that these new rates do not take into account the additional federal subsidies that will be offered to lower income residents, making the savings for some even greater. 

The announcement is a victory for Obamacare, which Americans still view warily, according to polls. A Gallup poll last month found that 42 percent of respondents said Obamacare would make their lives tougher, compared with 22 percent who said it would improve their lives. The New York report provides evidence that Obamacare can drive costs down.

“For the individual market, which has always been really complex and really expensive, the Affordable Care Act is bringing down rates in states around the country – it’s introducing competition and bringing down costs for individuals,” says Eileen Elliott, a health care attorney with Dunkiel Saunders in Burlington, Vt. 

But New York is not a typical case, others note. For one, the state has long required insurers to cover preexisting conditions – just as Obamacare now requires for the nation. It has also required more comprehensive care in individual plans than other states.

That means New York had instituted some of the most costly provisions in Obamacare before the federal law mandated them nationwide. Indeed, health insurance in the state has long been among the most expensive in the nation, especially for individuals. The average monthly premium for individuals in New York has been 66 percent higher than the national average, according to the Kaiser Family Foundation. 

The result was that few New Yorkers bought health insurance unless they had to.

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