Health Insurance Quotes Will Be Impacted by Supreme Court Ruling

The Supreme Court ruling on health reform will have a lasting impact on what Americans pay for health insurance. The Affordable Care Act has multiple provisions that will directly impact the cost of insurance in both positive and negative ways:

Guaranteed Issue – We have already seen what has happened to the cost of individual health insurance in states where they eliminated underwriting like New York and New Jersey. They go up and their uninsured population expands. New Jersey has 12% of their population without coverage which is 25% higher than Pennsylvania – a neighboring state – in spite of New Jersey’s higher income and lower unemployment rates. Its because individual policies cost two times what they do in Pennsylvania.

Individual Mandate – This provision will offset the cost of guaranteed issue somewhat, but the penalties are not high enough to ensure the participation you would need from the healthy population to offset those costs. A quick look at the costs in Massachusetts will show you how premiums respond to both a mandate and guaranteed issue. Its not pretty.

Preventive care and covering children to age 26 – These two provisions are both popular and not very expensive (maybe 2-4% impact on premiums) – my bet is if health reform is stricken, we will see this passed into law very quickly. Aetna, UnitedHealthcare and Humana are all saying they will keep these provisions in their plans even if the law is stricken.

Medical Loss Ratio (MLR) Requirements – Carriers were required to keep non-medical costs below certain thresholds – most carriers were already there – so no real impact. Most carriers just used this provision to cut agent commissions, which cost this country thousands of jobs.
Premium Subsidies – My only thought here is how was this bill actually going to pay for this? This bill was not funded adequately or with much more than smoke and mirrors. The claim was for huge savings in Medicare – but that was offset by the expansion of Medicaid – which the states have to fund a chunk of… Its just too easy to punch holes in how this $100B plan would never generate $100B in revenues.

At the end of the day, most Americans will be better off if the entire bill is stricken but doing so will create a vacuum that will need to be filled by something else. Let’s hope our leaders can actually work together to create a truly bipartisan plan that has a decent chance of working.

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