That may sound hard to believe, given all the stories in the last few months about people who lost their old coverage and now must pay more for it. But there’s no inconsistency here. In the transition from the old system, in which insurers could charge higher prices to the sick or avoid them altogether, to a new system, in which everybody pays the same price regardless of pre-existing condition, some young and healthy people must now pay more for their individual policies. In addition, the law requires that all new plans include a set of essential benefits—including things like maternity coverage and mental health that the old policies frequently excluded. That, too, tends to make insurance more expensive than it was last year.

But the federal government is simultaneously providing generous tax subsidies, designed to offset those price increases and, more generally, make health care more affordable for people who couldn’t pay for it previously. Those subsidies, along with the law’s expansion of Medicaid, are the most expensive part of the law—together they account for the vast majority of its spending. The cost of those subsidies depends on the raw, unsubsidized prices that insurers are charging upfront. The higher the premiums, the more expensive the subsidies. And that’s where the law has, so far, outperformed expectations. Insurers are offering plans with lower premiums than CBO and other experts had predicted. As a result, the federal government is on the hook for less financial assistance.

Better still, the CBO says that it doesn’t expect across-the-board premium spikes next year, as the law’s critics and even some insurance company officials have speculated would happen. Of course, the CBO could be totally wrong about that. And even if it’s not wrong about what’s likely to happen to premiums overall, it’s possible—I’d say likely—that prices in some parts of the country will go up significantly next year. But CBO's new projections would put such rate increases into better, more favorable perspective. Premiums are already lower than expected. The law is already reducing the deficit by more than expected. So even if premiums rise next year or beyond, the law could still end up calling for lower spending—and more deficit reduction—than the original projections suggested.

"It is good news that premiums have come in lower than expected, meaning lower costs for the federal government and for families as well," says Larry Levitt, senior vice president at the Kaiser Family Foundation. "It’s a sign that the ACA may be working to hold premiums down by forcing insurers to compete over price rather than by cherry-picking healthy people. Sustaining this, as CBO anticipates, will be key to the law succeeding."