Question

Summarize the effect of the PPACA on insurance companies.

Answer 1

The new health care reform act is affecting many different industries and businesses, from the amount of health care coverage provided for employees, to the way businesses report the costs associated in their employees’ compensation packages.Patient Protection And Affordable Care Act(PPACA) also known as Obama care opens up buying pools to individuals which decrease the business for insurance companies. As PPACA is focused on health insurance delivery system.But compensation paid to agencies and independent agents had impact and effect on Minimum Loss Ratio requirement which cashed to reduce commissions especially small and individual group agents.The effect helps small group market to encourage individual health insurance which reduce impact on administration expenses.Insurance companies change their role to consulting and payroll services, third party agents and formulation of long term benefits.