The vote on the health care reform law may have been cast, but the dust on the issue has yet to settle. Fierce debate on both sides of the fence continues with no signs of abating. All of the hype surrounding health care reform can cause confusion for the average person witnessing the process from the sidelines, so the team at Dan Abrams Health Insurance Service has developed a brief synopsis on the main issues from each side’s perspective, as well as the law’s potential effect on your health care California insurance.
• Americans will be unable to retain their current California health insurance coverage.
Opponents of the legislation have asserted that if an employer switches insurance carriers or reduces its share of premiums by more than 5%, the plan will lose its “grandfathered” status – that is, a plan in existence prior to adoption of the law – and employees will be forced to drop the coverage. “Grandfathered” plans are not required to offer health care reform consumer advantages like free preventive services, an increase in the annual dollar limits on benefits and improved access to out-of-network emergency care.
Truthfully, there are not many changes to be made, as the vast majority of currently “grandfathered” plans already offer some or all of the consumer protections designed by the law. Consequently, California health insurance policyholders would likely see little to no changes to these benefits.
• The health care reform law will drive up costs and premiums.
Critics argue that the aforementioned consumer protection provisions will force insurers to raise premiums, thereby increasing the cost of health care California for policyholders. In response, the Obama administration has cited estimates from sources including the Urban Institute and Mercer that state that the maximum amount of increases brought about by the law is 1% to 2%. In reality, any long term prediction is speculative at best. Calculating the law’s effect on health care costs – and subsequently, premiums – is tricky. This is partly due to the many factors that drive premium rates including charges determined by doctors and drug makers, the number of people that need care and how much insurers spend on administration or retain in profits.
• Medicare will suffer from drastic cuts, and senior citizens will lose some benefits.
While health care reform does slow the growth of Medicare spending over the next decade, it does not cut spending from one year to the next. The growth of fees paid to hospitals, home health agencies and other providers will be reduced, as well as payments to private Medicare Advantage insurance plans. While basic benefits provided under Medicare will be retained and some new benefits have been added, the aforementioned cuts in reimbursement to insurers may result in senior citizens paying hundreds of dollars more per year in out-of-pocket costs. The cuts may also prompt the reduction or elimination of extra benefits formerly included in private plans. However, one advantage of the legislation is the elimination of a co-pay for certain preventive services.
The licensed and experienced agents at Dan Abrams Health Insurance Service are happy to answer any questions you may have about health care reform and how it may affect California health insurance coverage. To speak with an agent or obtain free quotes on health insurance via our instant quote engine.
