Can Health Insurance Exchanges Deliver low Cost Medical Insurance? « Health Insurance Advisory

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new healthcare reform lawThe new healthcare law, called the Patient Protection and Affordable Care Act (PPACA), represents comprehensive healthcare reform legislation signed into law on March 23, 2010. It contains numerous provisions designed to protect consumers and promote low cost medical insurance, including many new taxes to pay for the cost.

In this section of the site, you can also obtain the following information specific to your state: available medical insurance options, efforts to regulate medical insurance premiums, healthcare, the individual medical insurance marketplace and the new healthcare law.

Our objective is to help Americans make sense of the new healthcare law by explaining key provisions in plain English and assisting individuals, families and the self-employed in using this information to find and secure affordable medical insurance.

Can Health Insurance Exchanges Deliver low Cost Medical Insurance?

Author: Pete S - Sr. Staff Writer | Dec 10 2011 | Insurance Exchanges - New Healthcare Law

Health insurance exchanges are the key mechanism through which the Obama administration intends to implement its primary vision for healthcare reform.  Under the new healthcare law, called the Affordable Care Act (ACA), each state has been given an opportunity to establish a health insurance exchange by January 2014. The goal is for health insurance companies to compete for business on a transparent, level playing field that will drive down health insurance premiums and give individuals and small employers greater purchasing power. Will the exchanges fulfill the promise of low cost medical insurance for Americans?

The concept of a health insurance exchange is one of the new healthcare law’s central vehicles through which individuals and small employers would be able to obtain medical insurance at rates similar to those enjoyed by large groups that have the ability to negotiate favorable discounts.  By pooling the lives of individuals and small groups into large purchasing blocks, the hope is that Americans will get low cost medical insurance. By the time ACA is fully implemented in 2014, the health insurance exchanges will serve as a central marketplace where millions of people will buy medical insurance and provide assistance to those who qualify for enrollment in state Medicaid programs (incomes below 133% of the federal poverty level), including others who might need access to medical insurance.

However, reaction to the health insurance exchanges has been very mixed, as the concept has many political dimensions. Some view the program as an encroachment on state’s rights since each health insurance exchange must be approved by the federal government. There is also the pending Supreme Court decision regarding the mandate that every American purchase a medical insurance plan or pay an IRS fine. This lawsuit has slowed the development of the health insurance exchanges at the state level because many states are waiting to see how the Supreme Court will rule. If states delay until the mid-2012 decision date, which could be mid-2015 if anti-injunction is injected into the decision, then being ready for enrollment in late 2013 will be very challenging. Delaying implementation, though, has not kept states from accepting part of the latest $220 million in grant money from the federal government designed to help speed the start-up. Even the states challenging the new healthcare law accepted the federal money.

It is also unclear to what extent more health insurance companies will exit the marketplace. If a health insurer wants to participate on an exchange, their medical insurance plans must meet stringent requirements set forth by the new healthcare law. If the individual mandate is upheld, then applicants must be accepted regardless if they have pre existing conditions. Health insurers will also face new, strict rating limits that cap the difference between the lowest and most expensive premiums they can charge. As a result, many health insurers may elect to withdraw from the medical insurance marketplace and focus on supplemental plans, such as dental insurance and critical illness protection. If this happens, competition will be eroded and Americans will ultimately end up with fewer health insurers vying for their business.

Lastly, the outcome of next November’s election may also impact the new healthcare law. Depending on who takes control of the White House and both houses of Congress, the law may be amended by removing some of the more contentious provisions.

Will the Affordable Care Act really result in low cost medical insurance come 2014?  We will all just have to wait and see.

In the meantime, can help you save money today on medical insurance with our online medical insurance quotes. They function like an exchange is intended to operate in 2014. Shopping and comparing rates and plans with leading health insurers in your state is easy. Need support selecting the best medical insurance plan? Call us today at 800-403-8511. We can help most individuals secure low cost medical, regardless of their health status.

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