Amendments to the Affordable Care Act were rolled out just this week as promised last 28 February 2018. Since the new tax law in December eliminated the state requirement that everyone should be covered, the latest in a series of changes are considered by many to be a push and pull between opposition lawmakers. However, one controversial tweak in particular has garnered the eye of the insurance community.
A notable variation to the previous iterations of the ACA are the new Premium Increases for Comprehensive Plans. In an interview with Dr. Nancy Nielsen, former president of the American Medical Association, these increases are to be seen in a positive light. She says that such changes are beneficial to insurers in that a newfound flexibility is possible. Under these new guidelines, a different set of strategies may be employed that could make insurance more attractive to the public. Insurers would spend less than 80% as to the medical loss ratio. This would drastically open up the insurance market to more competitors, alleviating the monopolies in some areas and perhaps allowing for better services to come in. In that respect, it is beneficial to the public as a whole.
On the other hand, Dr. Diana Zuckerman, the president of the National Center for Health Research, saw the difficulties that came with the changes to the premium policies. For her, the amendments would make insurance less affordable to the public. People with pre-existing conditions might have problems availing of policies under these amendments.
These amendments will likewise allow insurance companies to sell ‘skimpier’ products. She perceives these changes as insurers’ options to shave off crucial coverage in the their standard packages. This will allow them to charge more for the same policy simply by adding ‘premium’ to the name. Such packages will go up by 18% in over 43 states, and a predicted 2.5million Americans may lose their coverage in the weeks that go by. The standard packages will be less expensive but will also cover less.
What these new premiums allow for is a double-edged sword in that it will be beneficial to insurers but not to the insured. As more players come into the market, perhaps better packages will be formulated to cater to the wider public. As it stands now however, there isn’t much else to do but wait and see.
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