When the Affordable Care Act kicks in next year, some consumers and small businesses will find that it may deliver access to care – but not affordability.
The ACA promises coverage to every American, no matter what their age or health issues. But some of the law’s provisions will play a part in raising health insurance rates for many.
New taxes and fees. Eight new taxes and fees affect individuals, employers and health insurers. The health insurer tax alone will add some $100 billion to health care costs nationwide more than 10 years – directly affecting premiums.
New benefits, new costs. The reform law mandates that all insurance plans include a package of deluxe benefits, which will add greater coverage and greater cost to policies.
New formulas for what you pay. The ACA creates new formulas to determine how much your health insurance policy will cost. Rates will no longer change due to age or health status. Older, sicker people, who use more medical services, will pay less. Younger, healthier people, who typically use fewer services, will pay more, subsidizing the cost of covering less healthy individuals.
These new formulas for determining cost, new taxes and fees, and new, mandated benefits all mean many Americans will pay more for health insurance.
In some cases, rate increases might be offset by government subsidies available to individuals in certain income brackets. Some small businesses are also eligible for tax credits to offset increases. And those whose plans have “grandfather” status should not be heavily impacted by the ACA in the short term.
Expanding coverage to millions of uninsured citizens is a commendable goal. But we must remember that the ACA’s design comes at a cost. The promise of affordability is one the administration cannot keep for everyone.
President and CEO,
Blue Cross and Blue Shield of La.