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- Before the Affordable Care Act the public paid uninsured patients accounts
- The individual mandate requires every eligible resident to accept responsibility for his or her medical expenses
- Qualified health plans assured consumers that they would have adequate coverage in the event of a serious health issue
- Universal acceptance added risks for insurers
Obamacare may cost more than insurance did before the fundamental reforms. However, one must add in the same breath that the extent of coverage and depth of protection more than compensate for any added costs. Insurance that does not protect policyholders is not worth a price, even a lower one, to those in need. Before the ACA, health insurance often provided benefits that cost far more and delivered far less than Obamacare policies.
Many policyholders were disappointed and financially injured by artificially low limits on benefits and protections. Comparison shopping is a tried and proven method for getting high-value health insurance that meets consumer needs and preferences.
Comparison shopping is the best tool for getting lowest available prices on the federal marketplace and state exchanges. Enter your zip code above to compare FREE health insurance quotes and find coverage today!
Health Insurance before the Affordable Care Act
Prior to the Affordable Care Act, health insurance was difficult for many, impossible for a large segment, and expensive for everyone. Insurance companies used medical underwriting to eliminate people from coverage if they suspected they might require costly care.
The insurance industry provided coverage for the employees of major employers but was far more discriminating in the individual and family markets.
People with histories of illness or active conditions were routinely refused coverage. Women had to pay more for coverage because they either had or might have children.
Obamacare brought reform to the industry and greater fairness for consumers, The law made coverage possible for millions of uninsured Americans.
Limited Price Discrimination
The Affordable Care Act requires a form of community rating for applicants rather than individual rating using medical underwriting. The insurance companies can vary prices to the individual in limited ways and use selected factors. The below-listed items describe the permissible use of price discrimination in the Affordable Care Act.
- Age – Insurers can charge older individuals no more than three times the amount paid by the youngest member of the group.
- Location – Insurance providers must account for location when setting prices. The availability of services depends on the geographic area in which an applicant resides. The presence or absence of an adequate level of hospitals and medical care providers is a factor that directly affects service prices and insurance costs.
- Tobacco usage – Insurance providers can charge more for applicants that smoke or use tobacco in other ways. Tobacco usage accounts for a significant amount of premature death, disease, and injury in the US.
- Individual versus family coverage – Insurers can charge more for family average than for individual coverage. Depending on the number of persons in the family unit, prices may differ on average from the rates charged to individuals.
- Type of Obamacare Plan – Insurers can charge more for the higher benefit levels of Obamacare plans. Some plans cover as much as 90 percent of benefits while others meet the statutory minimum of 60 percent. The four types of Obamacare policies are Platinum, Gold, Silver, and Bronze.
Obamacare Policies that Increase Costs
Insurance companies operate for profit or gain and do not sacrifice those goals when setting prices for health insurance coverage. When setting prices, they estimate demand for services, the costs of medical care, and the likelihood of unusual levels of expense from the insured population. The below-listed items describe impacts of Obamacare reforms on insurance costs.
– Individual Mandate
The individual mandate both increased costs and lowered costs. It lowered costs by providing millions of new customers for the private insurance industry. The volume of new enrollees reduced the costs per subscriber by allowing for high patient volumes for network medical service providers. The requirement for coverage created a new demand for insurance services of every type.
The population of uninsured persons was probably not as healthy as the population of insured persons. The insurance industry for decades has weeded out those with pre-existing health conditions for exclusion. This process included common and easily managed conditions like moderate hypertension and early stages of diabetes.
The instance industry protects profits by estimating the future costs of medical care, the future demand, the future risks, and calculating a profitable level of insurance premiums and consumer charges.
– Universal Acceptance
Universal acceptance requires insurers to accept all applicants and treat then as part of a common class. They can only add to prices for individuals on a limited basis using approved factors.
– Minimum Essential Coverage
Minimum Essential Coverage adds meaningful requirements into every policy. They must have a minimum value, provide prevention services, and essential health benefits.
– Annual Limits
Annual Limits on Deductibles and Expenses prevent unlimited levels of out-of-pocket expenses before the insurance company must pay the entire amount of covered benefits.
Obamacare Provides Greater Value to Consumers
Prior to the Affordable Care Act, insurance policies often omitted key elements of coverage and this contributed to high costs and human suffering. For example, many policies omitted adequate amounts of inpatient care. Consumers that unexpectedly required hospitalization often found that they were responsible for the high costs of hospital care.
Some consumers were short of the needed amount of outpatient coverage. After meeting the deductible, medications, copays, coinsurance, and doctor visits created a financial burden for these policyholders.
After meeting the deductible, medications, copays, coinsurance, and doctor visits created a financial burden for these policyholders.
Insurance Profits Cause High Prices
The primary cause of higher prices for consumers under Obamacare appears to be the profits of the insurance companies. They have reduced benefits and the quality of services while raising premiums and deductibles.
The net result is that consumers pay far more money and get far less in return. They must pay enormous amounts in deductibles before insurance benefits flow, and then must pay substantial amounts of cost sharing.
- Narrow Networks- the unfortunate trend in health insurance is too narrow the scope and depth of provider networks. This means fewer choices and options for consumers.
- No or low Out of Network Benefits- the cost of using preferred or needed outside specialists or other providers can have devastating financial consequence. These expenses get little or no insurance contribution, and they do not count towards the limits on out-of-pocket expenses or deductibles.
Why does Obamacare cost more money?
Obamacare adds costs to health insurance because it adds benefits and protections that did not exist prior to the reform law. The costs added by Obamacare do not necessarily mean higher prices for consumers; the price decision comes from private insurance companies that offer health plans. The private insurers set prices for premiums and benefits.
Private insurers negotiate terms with the actual medical services providers that comprise the service networks for qualified health plans.
Comparison shopping is an effective method for finding the best values in Obamacare qualified health plans. Consumers that use comparison shopping save more and get more than other insurance customers.
Click here and enter your zip code to compare free private health insurance quotes and save money!
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