A few years ago President Obama appeared on television and told the American public he was going to give them the ultimate free lunch – he said his new Affordable Care Act (ACA) would not only cover 30 million uninsured people, but also reduce the cost of insurance premiums for the typical American family by $2,500. The reality is worse.
One of the latest articles in Forbes Magazine states that Obamacare will actually increase Healthcare spending for a typical family of four by $7,450. In that same article, it is mentioned that the experts working for Medicare’s actuary have again reported that in its first 10 years, Obamacare will boost health spending by “roughly $621 billion” above the amounts Americans would have spent without this misguided law.
The ACA is mainly a set of regulations imposed on health insurers, employers, and our citizens. Very little, if anything, has been done to reduce the cost of medical care, which is the main cost-driver of health insurance premiums.
On Jan. 1, 2014, the following mandates on health insurers become effective:
Guaranteed Issue: Health insurance is meant to be underwritten. It is a risk-based product. What has been overlooked by ACA’s regulations is the reserve requirements health insurers must have for incurred and future claims. Guaranteed issue will increase claims. Higher claims require increased reserves. Beginning next year, health insurers can no longer underwrite a risk. They will have no choice but to increase premiums significantly. Guaranteed issue was tried in the individual health insurance market in 1995. The result was major increase in premiums. The mandate was eventually rescinded.
Waiver of Pre-existing conditions: Again, another method to limit exposure, which helps keep premiums lower. The maximum pre-x period is 12 months. This provision will be eliminated by ACA. This becomes another high cost issue for insurers, which impacts claims paid, thus increasing reserve requirements.
Community Rating: Does away with normal demographic rating. Gender is eliminated. Limits maximum premium on older insured’s (65). The limit is three times the rate charged for a 20 year old. This will cause premiums for the under 30 age group to increase by 30%. Premiums for employers with 2-49 employees will be per employee “age” based. No longer will average premiums be used.
Exchange Navigators: These enrollers are not required to have a health insurance license. They will be marketing health insurance but not licensed as agents and brokers are. They are not required to have taken ethics courses – no CE requirements or errors and omissions insurance. The PUBLIC BEWARE.
Obamacare Group Exchanges: Employees eligible for an employer’s plan are not eligible for exchange enrollment. Dependents who do not enroll in their spouse’s employer medical plan are not eligible to enroll in an exchange. By 2015, exchange medical carries face premium increases. Penalty for not Having Health Insurance: Minimum $95 annual fine to a maximum of 1% of income. Can only be collected if a refund is due. Young persons facing premium increases will opt for the fine and walk away. (Where does that leave the older people depending on their financial input into the system?)
These are all part of what will drive up premiums. It is unaffordable, and frankly, immoral.