On January 1, 2014, the most far-reaching provisions of the Affordable Care Act go into effect. Insurers will be required to accept all applications. This means that no longer can an individual be declined or “rated-up” for pre-existing health conditions in the personal health plans market.
Open enrollment for the exchanges (new health insurance marketplace) begins on October 1, 2013. However, we are still aiming at a moving target. Nobody knows exactly what the plans will look like. Nobody knows how much the new plans will cost. Some sources predict rates to increase from 30% to 70%. Despite all the uncertainty, there are some things coming to light and a recent article helped provide more information in this regard. The link to this informative article is here.
One of the most revealing quotes was made by the CEO of Aetna when he referred to the anticipated increased cost of coverage as “premium rate shock”. Because insurance companies will have to insure high risk people (those with serious health conditions) without increasing their premium, they will pay out much more in claims.
Currently, insurance companies decline a very high percentage of applicants. The declination rate for 2012 was 22%. In Georgia, some carriers exceed the national average. For example, Kaiser Permanente declines 34% of all new applicants. Many carriers that don’t decline quite as much (Humana, Assurant Health), will exclude coverage for many pre-existing conditions and medications. So, insurance companies know they will have to make some substantial adjustments. Not only will premiums be much higher, but plans purchased through the public exchanges will likely have reduced benefits and very narrow provider networks.
The folks who will have to pay a much higher premium are younger people (especially younger men) who make more than 400% of the poverty level. Subsidies will be available for low income earners. Since rates will be unisex, males will be hit hardest. Currently, women pay more than men for health insurance — especially during child-bearing years. For more information on who will likely pay more, I refer you again to this recent article for more insight.
As we move closer to October 1, more information will become available and people will be able to plan accordingly. We are available to help answer a lot of “what if” scenarios and provide guidance through this time of transition.
For quotes on health insurance plans in Georgia, please click here if you are under age 65; and click here if you are 65 or older. For small businesses, please call us for advice and proposals.
Peachtree Insurance Advisors 678-236-1600 Marietta, GA — serving Greater Atlanta and all of Georgia
