The US health insurance industry has undergone many changes since the official implementation of the Affordable Care Act. This reform will enable all Americans to purchase health insurance without exclusions for pre-existing conditions. The Affordable Care Act will expand coverage and offer new benefits to individual health coverage. Paradoxically, this means that some carriers will increase premiums.
According to a report by Milliman, the rise in the cost of health care coverage is a result of covering pre-existing conditions, broadening health care policies and extending coverage to millions of uninsured Americans. Moreover, the new health insurance tax will also result in higher premiums. Nevertheless, the Affordable Care Act has enabled provisions that make coverage more affordable by offering cost-sharing or premium subsidies. Moreover, the act has implemented a transitional reinsurance program which pools funds to offset high-cost enrollees.
The Milliman report notes that families of four with an income of about $94,200 and individuals with an income of $45,960 are eligible for financial assistance in order to lower health insurance costs. The report estimates that subsidies will cover about 40% of health insurance costs for individuals and families falling into the silver plan category. For groups within the bronze category, low-income families and individuals, financial assistance could cover up about 94% of health insurance cost.
The impact on specific groups and individuals is likely to vary. Location, health status, income level, age, and gender will have an influence on health insurance premiums. While “young, healthy males” could see an increase due to health insurance rate changes, “older, less healthy” people might be able to benefit from lower health insurance rates.