No Minor Obama Effects On Individual Health Insurance

Written By: Sal Marino on August 4, 2010 No Comment

The recently passed health insurance reform law will touch most Americans. A major change affecting individual health insurance is a prohibition on denial of coverage for preexisting conditions. Of course, there is the requirement for all Americans to have insurance. Insurers are also prohibited from putting yearly and lifetime coverage limits. There is the group health exchanges to come that could lower policy costs. Hence, the Obama effects on individual health insurance will impact the biggest shortcomings in the prevailing market for individual health insurance.

As the reform bill was passed policy rates were climbing. A report revealed that members of the middle class were losing health insurance faster than any other income group. Those who missed the Government provided safety net because of their income were thrown on the mercies of the individual market. Here, insurers have been denied coverage based on preexisting conditions and are vulnerable to charges of high and ever increasing premiums.

The limits insurers placed on who gets coverage is one of the three major problems that needed to be addressed in the individual market. The other two are the affordability and whether the policy would pay for what is needed when the insured gets sick. A study found that excluded conditions varied by insurer. In a 2001 study by the Georgetown Health Policy Institute, researchers 37 percent of applications were rejected. There were insurers who would turn you down if you had hay fever. The public thus was a victim of a roulette insurance market. How easy is it for individuals to wade their way through the market to insurers who would cover them is a question. Although federal law requires insurers to sell policies to certain people who lose group coverage, including those who lost their jobs due to lay offs; but places no limits on what an insurer can charge. In February 2010, Connecticut announced that health premiums for individual medical plans rose in price by 20 percent over in 2009. In this void have stepped some states in varying degrees. Maine, Massachusetts, New Jersey, New York and Vermont required insurers to sell individual policies to everyone, irrespective of their health. Washington state required insurers to take individuals with some health problems. While, Iowa required insurers to cover preexisting conditions in new applicants, if they had insurance previously for those conditions and did not let the insurance lapse.

Most states permit insurers to look at the health background of an applicant when determining policy and costs. Even though, group plans supported by employers cover everyone, states generally do not guarantee that individuals get coverage. However, even if states have held insurers accountable for revoking coverage, others have not. Prior to the general election, a bipartisan bill proposed coverage for everyone with insurers required not to deny insurance to applicants.

The public hospitals have been at the vanguard of the victims of inadequate and absent coverage. They have provided for the uninsured and those under insured by Medicaid, that reimburses them at below cost. They are also unable to compete with private and nonprofit hospitals for patents with private health insurance coverage. Yet, the cost of providing care to the uninsured and under insured has climbed and taxpayer support remained static.

U. S. Employers are looking to shift more burdens to their employees as they have seen their health care costs rise 7.3 percent in 2009 at an economically challenging and low inflation period. A team at Thomson Reuters analyzed insurance claims data for 144 small, medium sized, and large companies found that smaller employers saw costs rise by 9.8 percent. Medium-sized employers had a 10 percent rise in costs compared to 6.5 percent in 2008. Large companies had costs rise by 5 percent in 2009, down from 5.8 percent in 2008. Meanwhile, according to a report aptly titled Barely Hanging On, released by the Robert Wood Johnson Foundation in March 2010, the cost for an employer to offer individual and family plans to workers increased 43 percent and 55.6 percent, respectively, during an eight-year period. The amount employees paid for the single and family programs increased 64.5 percent and 80.5 percent, respectively. Whereas, median household income had fallen 3.5 percent to USD 51,233.

Large corporate employees have enjoyed the most secure and highest quality coverage in the nation during their employment. They have not been victimized during their employment with revocation or denial due to preexisting conditions. Nevertheless, a recently released annual survey by the National Business Group on Health has indicated that the impact of rising costs means this island of safety is about to be buffeted. This surveyed large employers indicated they were considering shifting more of the cost on their employees.

As indicated by a study carried out jointly by Harvard researchers illness led to majority of filings for bankruptcy in a year preceding the housing bust. The majority of filers had insurance insured and most of them were middle class and college educated. They lost their jobs due to illness and with it their insurance. The study revealed that you are a serious illness away from bankruptcy. Insurance policies may offer little help when a serious illness strikes. Bills that were not paid by insurers averaged over 10,000 dollars for those with private insurance. There are big Obama effects on individual health insurance coverage.

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