Unaffordable Insurance Act: Guaranteed Issue Coverage to be Exorbitant

“the Obama Administration [released] long-awaited regulations that will have the most impact on the shape, and the price, of health coverage when Obamacare’s major provisions take effect a little over a year from now, on January 1, 2014.”

““Insurers will not be able to charge someone more just because she is sick or because she used to be sick,” as Health and Human Services Secretary Kathleen Sebelius described the law’s ban on surcharges and exclusions for pre-existing conditions.’

“How much could this add to premiums? We can get an idea by looking at premiums for “guaranteed issue” insurance that already exists, as a result of the HIPAA law passed in 1996 (by a Republican Congress, and signed by President Clinton). HIPAA requires guaranteed issue insurance with no surcharges or exclusions for pre-existing conditions to individuals and families who’ve lost employer-sponsored coverage and exhausted their COBRA continuation coverage (if any).”

‘To take an example, in Virginia CareFirst BlueCross charges $1978 per month for guaranteed issue coverage (with variations depending on the deductible the customer selects). An equivalent plan without guaranteed issue costs $333 per month. That’s a difference of $1645 per month, or almost $20,000 per year more. As it stands now, people with pre-existing conditions might find it worthwhile to pay that much, but others can get coverage at a much lower rate. But for 2014 and onwards, only the more expensive coverage will be available. This means that healthy families buying coverage on their own could see premium increases of $20,000 – a far cry from the decrease of $2500 promised by candidate Obama in 2008.’

“In addition, the new rules also require plan benefits in each state to be equivalent to those of a benchmark “typical employer plan” offered in that state now. The rules provide three options for selecting this benchmark plan, and in all cases the benchmark plan is likely to be more generous (read: more expensive) than a typical individually-purchased plan today. In other words, the most generous (expensive) plan of today will be the minimum plan in 2014. Lower-cost options would not be available.”

HHS Releases Obamacare’s Long-Awaited Health Insurance Rules

Robert Book, Contributor



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