Health Insurance Articles

Changes In Health Insurance Law That May Drive Down Rates

2010-11-21

With changes in health insurance law on the horizon, many people wonder just what will happen to their health insurance rates. Some are afraid that they monthly premiums they pay will increase, while others are concerned that the quality of care they receive will decline as the new laws come into effect. Although it is impossible to accurately predict what will happen when the new laws come to pass, there are a number of things that are likely based on the way the legislation is structured. This new insurance law is some of the boldest that the country has ever seen, and while it will most certainly have an effect on health insurance rates; it is possible that the effect will be to drive them down, rather than up.

The first reason for this is the creation of a government-run alternative to private health insurance. This federally sponsored program is intended to allow Americans with no access to health care a way to not only find a policy, but one that meets their everyday needs. This plan will have a cost, and Americans will have to pay a monthly premium just as if they were paying private insurance. It will offer a range of services, though not so broad as those offered privately. Speculation at this point is that this new system of lower-cost health care may entice middle-class Americans away from their current providers and encourage them to purchase federal insurance. In response, some believe that private insurance companies will have to lower their rates to stay competitive in the new marketplace.

The new insurance law will also affect how private insurers run their businesses, in that they must meet standards of care and treatment set out by the government. As a result, some speculate that this will cause a demand from consumers for lower health care as they discover exactly what government-run facilities provide that their care providers do not or have been charging them for. While this government oversight may lead to more red tape and longer wait times, it may also force insurers to re-evaluate the way they set and regulate premiums.

Although health insurance rates are constantly fluctuating, the new insurance law will almost certainly have a long-lasting effect on them. What that effect will be and whether or not it will benefit consumers has yet to be seen, but there is a good possibility that competition from a government agency will drive down prices for those who are currently ensured by private companies. That, in addition to migration of those who are dissatisfied to government programs, may mean lower rates for all citizens from all walks of life.