Health care exchanges could lower premiums – if they're bought comments3 inShare 1More By Jim Axelrod

(CBS News) NEW YORK — On Thursday, the president promised what he called “more bang for your buck” when a major part of his health insurance program opens for enrollment in October.


The Affordable Care Act is facing public doubts and technical setbacks, but President Obama said costs are falling and will fall even more when uninsured Americans begin enrolling in health care exchanges where insurance companies will compete for customers. There are potential savings to be had — if the right customers buy in.


Charles Lenchner and his girlfriend Alison Gibson plans on getting health insurance through an exchange set up by New York State and through President Obama's Affordable Care Act.Charles Lenchner and his girlfriend Alison Gibson plans on getting health insurance through an exchange set up by New York State and through President Obama’s Affordable Care Act.

/ CBS News


Charles Lenchner, 43 and uninsured for most of the last four years, doesn’t even open emergency room bills anymore for treatment of his migraines.


“‘Cause when you can’t pay a hospital bill, you know they keep on sending them (and) you still can’t pay,” Lenchner said. “What’s the point?”


Two weeks ago, Lenchner — a self-employed social media consultant — finally got insurance for $550 a month. His girlfriend, Angel Gibson — also self employed — pays $350 for hers.


Beginning in January, however, they can buy insurance through exchanges New York State is setting up — and save big. Lenchner expects to save over $200 a month in premiums.


“Finally!” he exclaimed. “And not just for myself, but I think of all my friends who don’t have health insurance.”

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New York is one of 16 states, plus the District of Columbia, setting up these exchanges. In New York, 2.6 million people are uninsured. State regulators estimate 615,000 people will buy insurance through exchanges in New York. Regulators estimate average savings for New Yorkers of 50 percent.


“And now I’m like, ‘I’m joining the ranks of normal people,'” Lechner said. “I can go see a doctor if I need to.”


But two-thirds of states aren’t implementing exchanges on their own, leaving the federal government to intervene.


Those who don’t buy insurance by March 31 face a fine: $95 the first year, or 1 percent of annual income. That’s still far less than even the cheapest premiums. The challenge for the law’s supporters is to get enough younger, healthier people in the pools to balance the risk of carrying older members more likely to see doctors. Angel Gibson says that’s going to require a change in thinking.


“Because I think most 20-year-olds can’t imagine life without a phone,” Gibson said. “Hopefully we’ll get to a point where people can’t imagine not having insurance, too.”


The best estimates from the White House put the number of uninsured 18- to 34-year-olds across the country at 19 million uninsured. The thinking is 2.7 million of them need to sign up to buy insurance through one of these exchanges in order for premiums to come down.

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