If I read Reuter’s article about the recent Price, Waterhouse, Cooper report about how the insurance companies will be affected when Obamacare goes into full effect in January of 2014, I must conclude that the insurance industry is in for a tough few years.
The Associated Press reviewed the same report and paints a much rosier picture.
Once again, the press is trying to predict the future. Ironically, while both of them talk about the future of how insurance companies will be affected, neither one of them talk about the additional taxes that the PPACA levees on insurance companies. Nor do either talk about the escalating cost of health care that is being charged by doctors and hospitals since Obamacare became law.
With all the political rhetoric, it is easy to forget that insurance companies are just bill paying services. They do not provide health care. Health care is provided by doctors and hospitals. All the insurance company does is pay the bills.
Since everyone else is predicting what will happen in the future, I will as well. I predict that insurance companies have already seen the worst of Obamacare. The future for insurance companies is not as bleak as Reuters would have you think nor as profitable as the Associated Press implies.
The changes that will happen in 2014 will affect middle America more. In 2014 every American will have to choose 1 of 4 government approved, “Essential Benefit” plans. Early indications from HHS are that the “Essential Benefit” plans will be one of the 3 most popular group plans in the state for state-run exchanges and one of the 3 most popular group plans that are offered to federal employees for states that refuse to establish an exchange of their own.
That means that Americans, like me, who have elected to purchase individual health insurance since it is 40%-60% less costly, will have no choice but to purchase the more expensive group option. Both my wife and myself are in our 50s and do not smoke or take drugs. The plan I have now does not cover maternity or substance abuse. Since neither of those risks are covered, I pay about $350 for the two of us. In 2014, that option will no longer be available to me.
The “Essential Benefits” plans require that my premium include maternity and substance abuse. Everything that I read says that my premium will jump from $350 on December 2013 to over $1200 a month in January 2014.
The formula for a good blog post says that I am supposed to add a “Call to Action” in my final paragraph. There is nothing that you can do to prevent the mandates of Obamacare from starting in January, 2014. It will be up to a future congress and president to change an existing law. All you can do is start preparing to pay higher premiums for health insurance.
If you are lucky enough to get a federal subsidy to help you pay the new required premiums, congratulations. However, if you are like me, even if you do get some federal subsidy money for your health insurance, your premiums are going to increase.
If you think that the insurance companies are going to absorb higher bills from health care providers and the new taxes that are heading their way without passing those costs on to you, you do not understand how business works.