Published from the Springfield Business Journal
I have been a licensed agent specializing in health insurance for 12 years, and I will be the first to admit that both our health care delivery system and the insurance that covers its care has never been a smooth process. The processes are neither transparent nor generally affordable, and the applications weren’t designed with the ease of consumers in mind.
Health care is currently closing in on consuming almost 20 percent of the national gross domestic product, and with the implementation of the new federal programs, the health insurance industry is taking on a tremendous amount of change.
Whether you refer to it as the Affordable Care Act or Obamacare, it is all one and the same. The goal is to reduce the cost of health insurance for Americans, significantly improve the care provided by hospitals along the way and provide a more sustainable system.
Recently, the U.S. Supreme Court upheld the rule mandating Americans purchase coverage or pay a penalty.
Going forward, it will be extremely expensive for an insurance company to deliver affordable rate plans that include these increased levels of coverage and still retain profitability.
Insurance companies will have a hard time offering affordable plans due to some of the provisions included within the ACA. A few of these cost-driving factors will include guarantee issue, acceptance of pre-existing conditions and an increased level of benefits.
This all equates to higher premiums because insurance companies will be absorbing a lot more risk for catastrophic health conditions that they were otherwise able to deny.
It also will increase rates as consumers begin to receive care after a possibility of not having access to affordable health care in the past.
Some of the major changes include how states expand Medicaid, and manage their high risk pools, groups and individual health insurance for employers, self-employed and self-insured plans.
Health care exchanges – aka marketplaces– are being developed and will be available for those who are unable to receive insurance by their employer and are not eligible for Medicare.
Exchange enrollment begins Oct. 1, and Missouri is still in the formation process of coordinating with the federal government so we can deliver options to the consumer.
Health insurance at its core is meant to provide a safety net of cost sharing that reduces the loss of personal assets, wealth and dignity in the event you have a catastrophic claim. Plans that are richer in benefits typically provide preventative and routine care along the way. The plan benefits included with the Essential Health Benefit guidance recently released by the U.S. Department of Health and Human Services is both very rich in benefit and widely considered to be costly. These costs will be passed down to the consumer in the form of higher premiums.
The fact is that health care is expensive, in part because research and development has evolved to provide Americans the highest quality of care in the world.
However, cost was not what our elected officials focused on when they wrote and passed the new law. Implementation of the ACA is projected to drastically increase the costs of health care. Carriers are reporting rates could increase from 35 percent to 100 percent for the newly mandated coverage beginning Jan. 1, 2014.
As I watch, listen and assimilate the information trickling out from the various governmental agencies charged with providing the guidance for which they were legislatively put on task, all I can hope for is that the change will do what was intended – provide affordable health care.
John Osborn is owner and partner with Osborn & Associates. He can be reached at email@example.com.