Tuesday, July 13. 2010
One of the biggest questions facing us today is will new health care law result in lower health insurance premiums in the future or not?
As waive one of health care reform- Patient Protection and Affordable Care Act (PPACA) starts on Sept. 23rd, 2010 here are a few things we need to think about:
- Starting Sept 23rd, 2010 all insurance companies will be required to: provide unlimited lifetime maximums (prior most plans were $2, 3, 5 million etc.), cover dependents through age 26 even if they are not a full time student (prior was usually 23 if they WERE a full time student, 19 if not) and they must provide 100% coverage (no deductible or co-pay) for all the old and new wellness services under U.S. Preventive Services Task Force (USPSTF) guidelines. For a complete list of these new Type A and B recommendations visit: New Wellness Services List
As we have already seen by looking at premiums on Sept 22nd and then again the very next day on Sept 23rd, 2010 this will raise premiums in the average range of 13%.
- Also being calculated as we speak is something called MLR- or Minimum Loss Ratio. This will take full enactment in Jan 2011. MLR simply means that insurance companies must pay out 85% of their premiums in health care costs. This does NOT include: administration, mailing out ID cards and policies, processing the claims, overhead, salary, rent, benefits, or profit. If the insurance companies do not pay out this amount at least they will have to refund the money back to the policyholders. If they do pay out this amount or even more they will almost certainly ask the State governments for a premium increase in the following year.
So, if you stop and think about this for a minute you will see that all future health insurance premiums will be dictated by what the claims are. If claims are low policyholders will get a refund, if claims are high your premiums will continue to rise. The rules are set and only time will tell which one will happen.
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