Question

in regards to the affordable care act, how have health insurance premiums been affected?

Answer 1

Affordable Care Act (ACA)

The Affordable Care Act (ACA) is the complete healthcare reform applied into a law by President Barack Obama in March 2010. It is officially known as the Patient Protection act and Affordable Care Act. But, often it is known as Obamacare. This law comprises a list of health care policies proposed to lengthen the health-insurance coverage to millions of uninsured Americans. The Act extended medical aid eligibility, made health insurance exchanges, and inhibits insurance companies from refusing insurance coverage or charging more due to pre-existing illness conditions. It also permits children to continue on their parents' insurance plans till the age of 26. Lower-income families can be eligible for additional savings on health insurance plans on the basis of premium tax credits and cost sharing reductions.

The Affordable Care Act was considered to decrease the cost of health insurance coverage for people who are eligible. The law consists of premium tax credits and cost sharing reductions to support in lower charges for lower income individuals and families. Premium tax credits reducing the health insurance bill in each month. Cost sharing reductions reducing excessive costs for deductibles, copays, and coinsurance. It also decreases the total amount of pay in a year for health insurance. The Affordable Care Act health insurance plans that sold on the health insurance market must cover following specific essential health benefits:

• Ambulatory services related benefits

• Breast feeding related benefits

• Emergency services related benefits

• Family planning benefits

• Hospitalization benefits

• Laboratory services related benefits

• Mental health and substance use disorder related service and benefits

• Pregnancy, maternity and newborn care benefits

• Medical prescription

• Preventive and chronic disease management with wellness services

• Pediatric care

• Rehabilitative and habilitative care

Health insurers responded by hiking their premium rates especially on these standard plans that are used to determine the subsidies. So the scope of tax credits improved, which helped many people to buy more large plans at a lesser price or lower plans for free. From the year 2015 to 2018, insurance premiums had hiked by double digits, striking a high rate of 28 percent in 2018. Premiums increased sharply in the last years of the Obama government, as Trump government like to point out, mainly because of losses insurers suffered as they tried to estimate the health requirements of their new customers. Experts have expected a 1 percent to 3 percent hike in employer insurance premiums in 2011, due to insurance requirements introduced in the Affordable Care Act.

Premium hikes are simply the normal result of a law that works differently in every region and for people with different health statuses, it seems to be conventional wisdom that the Affordable Care Act hiked premiums in the individual or in non-group insurance market because it increased the quality and strengthen the coverage. Actually, many of the Affordable Care Act’s new rules expected the effect of increasing premiums, such as:

• Compulsory guaranteed issue regardless of person’s health status;

• Limitations on the ability to charge different premium charges based on anything like age and smoking habits;

• Requirements for plans to offer certain benefits considered as essential benefits.

• Restrictions on excessive costs for covered services in a given year

• The exclusion of any lifetime limits on coverage.