Starting next year, the law will require insurers to cover everyone who applies. That means health care costs could fall dramatically for people who have been unable to find coverage due to a chronic condition like diabetes or high blood pressure.
There also will be tax credits, or subsidies, given to people with incomes that fall within 400 percent of the federal poverty level. For 2013, 400 percent of the poverty level for all states except Alaska and Hawaii would be $94,200. These credits won’t lower premiums, but they can ease the insurance bill depending on a person’s income.
The credits should help the 20-something customers that insurers warn will see big premium hikes, said Linda Blumberg, an economist with the Health Policy Center of the Urban Institute, a nonpartisan policy research organization. She noted that people in that age range are more likely to be either working for an employer that doesn’t offer coverage or earning low wages that would entitle them to a sizeable credit.
“While these folks are potentially facing some premium increases due to all these reforms, they also are the ones most likely to get the financial help from the exchanges,” she said.
There are other changes that will benefit young and poor people. Some may qualify for coverage under the state-federal Medicaid program for the poor and disabled, which will expand in many states next year.
Additionally, people under age 30 who face big premium hikes will be able to buy plans that charge low premiums and just provide coverage for big or catastrophic costs. Those plans also will be available to people required to pay more than 8 percent of their income for coverage.
Plus, people who are age 26 and under are eligible to receive coverage under a parent’s plan, thanks to another overhaul provision that already started.
In addition to those changes, insurers will have to compete for business on the exchanges, which could restrain price hikes, said Larry Levitt, a private health insurance expert with the Kaiser Family Foundation, which analyzes health policy issues. He noted, for instance, that some are already creating narrow networks of lowcost providers to help keep costs in check.
“Plans are very focused on trying to get these premiums down,” he said.
But Robert Laszewski, an industry consultant and former insurance executive, said that theory assumes there is no competition in the marketplace now. He noted that a small company may get quotes from as many as 10 insurers competing for business when it tries to find coverage through a broker.
“I haven’t had one person in the industry remark to me, ‘Gosh, I wonder what the other guy’s charging,”’ he said. “They’re worried that all this stuff is so expensive, they’re not going to get the pricing right.”<< previous 1 2 3 4