Insurance Companies Pay more Under President Obama’s Health Care Policy

As a Research; Health Care Overhaul Seen Driving Claims’ Costs Up 32%

According to a new research, insurance companies have to pay 32 percent more for medical insurance under President Obama’s health care policy known as Affordable Care Act. Pay attention if you are buying a policy directly from an insurance company or you are totally uninsured. Employees who have employer plan provided by the employer then there is no need to worry at all.

Sicker people also use more health care services. According to one study, sicker people join insurance pool because the law forbids insurers from turning down those with pre-existing medical problems which are effective from January 2014. But Obama administration does not agree with this study and added that this study focused only on one part of the game and ignored cost relief strategies provided in the law like tax credits.

Tax credits help people afford premiums and special payments to insurers who attract an outsize share of the sick. It is also not taken into account potential price-cutting effect of competition in new state insurance markets. Secretary of Health and Human Services Kathleen Sebelius said that some of the health insurance today is so skimpy and they cannot be compared to the comprehensive coverage available under Affordable Care Act.

Another mismatch is there was not uniformity amongst all states. Some states have seen a decline in per-person medical cost. But the overwhelming majority has seen double-digit increases in their individual health insurance markets, where people purchase coverage directly from insurers. By 2017, the estimated increase under the new law would be 62 percent for California, 80 percent for Ohio, about 20 percent for Florida and 67 percent for Maryland. The main reason for higher claims costs is that sicker people are expected to join the pool.

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Different population and insurance rules in different states are also a reason for wide disparities. Most families and workers are relying on employers plan but the published report did not make similar estimates.

On the other hand, the report also did a good work. It founds that the law covers more than 32 million people and states including New York and Massachusetts saw a double-digit decline in claiming cost. The law has passed three years ago and uncertainty over costs has a major issue. The situation is, Middle-class people will purchase subsidized private insurance in new marketplaces and low-income people will go for Medicaid and other safety programs.

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