Understanding ObamaCare – Health Insurance

Affordable Care ActEffective 01 January 2014,  Health Insurance Companies will only be able to deny coverage for non payment of premium!  The Affordable Care Act also known as ObamaCare has made drastic changes to the way our industry operates and underwrites risk.   We will no longer be able to pick and choose clients; if clients cannot afford insurance and if they qualify for assistance, the taxpayers will foot the bill, if clients want to take their Federal tax deduction up front monthly, it will be provided as a discount to their monthly premium.  In addition, there are 10 required ‘essential health benefits’ that must be included in all health plans thereby driving up premium whether or not one wants the coverage.

Clients have the choice of purchasing a plan ‘On Exchange’  or ‘Off Exchange’ (the traditional way).  Please note that this is not a National Health system as witnessed in operation in many other countries; it is simply a Nationally recognized and governed exchange whereby insurance carriers can provide an approved plan on an exchange where clients can select the plan.   The plan codes are different on exchange than plans off exchange.  When clients register on the exchange, they must first provide their personal information, including income and tax status prior to being able to view and select available plans.

It remains to be seen if clients on exchange will be treated the same as clients off the exchange.  In the month of November,  39% of those applying to the exchange in California were on some type of assistance (MediCal).  If the exchange continues to support only those on assistance and older Americans with health issues,  it would be conceivable that premium rates would need to sharply rise to avoid bankrupting the exchange.

The vast majority of those contacting their insurance companies to make changes have expressed dismay with the new system of managing the health insurance industry.    The truth remains to be judged by history!