There are more taxes and fees associated with the ACA than before, there's a requirement to rate family members individually and the law eliminated health underwriting and waiting periods for preexisting conditions (which causes the largest effect in my state).
The underwriting and preexisting condition explanations may be the most significant because now everyone can join the insurance pool, and actually are required or pay a penalty if they don't.
Before ACA, insurance companies in many states, such as Alabama (my state), were allowed to offer younger, healthier individuals much lower rates than older sicker individuals.
Alabama had allowed medical underwriting, if you were going to be quoted a high premium , you have something wrong with you (which is justified being the insurance was going to shell out a lot for your care).
This means that those with expensive health problems will likely now jump in and buy coverage because it will be less expensive for them, or if they already have coverage their rates will go down. But that also means rates will go up for everyone else as the insurer spreads that new cost around as the insurance companies have to make up for the loss revenue.
The thing that happens when you eliminate underwriting is that you lump dissimilar people together. When you combine groups, one group is better off and the other group is worse off, in terms of premium prices.
As a policy, the elimination of medical underwriting and preexisting condition clauses helps broaden access to health care coverage and that was the aim of its inclusion in the Affordable Care Act. Reformers say it eliminates insurers from "cherry-picking" and reduces uncompensated care.
Another factor in premium hikes relates to how insurance companies assesses families. In the past insurance companies were able to offer one family premium, no matter the size.
The ACA requires that each member on a policy be rated based on their age, address and tobacco use. Then all of these individual rates are added together to determine the family premium. As a result, larger families may experience higher premiums.
The new tax/law limits how much insurers can vary premiums based on age. There used to be five levels of age insurers could offer variable rates for, now there are three. The result is older consumers have new protections against premium increases, but younger individuals may see premium increases
The new law requires all health insurance companies in the individual and small group markets to use a consistent rating method called “member level rating.”
For the individual market, this means each person on an insurance policy will now be rated based on age, whether he or she uses tobacco, and the county in which the policy holder lives.
For the small group market, this means each person on an employer´s plan will now be rated based on age and the employer´s principal business address.
For family plans, most family members will be rated individually. Once each person has been rated, the amounts are added together to get a family´s premium cost. For children age 20 and younger, the oldest three children will be individually rated and included in the family premium amount. Any additional children age 20 and younger will not be added to the total cost, however all children on the plan who are age 21 and older will be individually rated and added to the total premium.
With age rating, insurers are required to charge variable rates up to a maximum ratio. For example, the maximum ratio for age rating is 3:1 for adults 21 and older. This means that premium rates for older adults are not allowed to exceed more than three times the rate of a younger person. Age for rating purposes is determined on the date the policy is issued.
With tobacco usage rating, consumers 18 years or older who used tobacco an average of four or more times per week during the past six months can be rated at a maximum of 1.5 times more than a nonsmoker.
The long story short is this there is no free lunch.. As I said there's a cause and effect to every mandate. When the government makes it, you better believe it's always going to cost more.
Obamacare is a monster-of-a-trainwreck legislation. Everyone has to pay for it regardless. Under socialized medicine everyone is responsible for everyone else's decisions that impact their health.
Well I was explaining my take on what AB was saying.
Now explain to me how this policy doubles the cost to an insurance carrier. You say it's the govt who done it, so break down the loss to me.
If you can pin point cause you can explain it. And aint no one explained it to me so I would like to know.
