Health Insurance Articles

How 2012 Health Reform Laws Will Affect Private Insurance Prices

2011-11-07

The 2012 health reform package produced by Washington has boosters and critics who weigh in heavily on how they see the real impact of the new measure. For boosters, the stated key is that "Obamacare" will cut the cost of health insurance across the board. They claim the only change will be that one's health insurance policy will show as much as a $2,500 reduction per year. Critics are far less sanguine about the new health reform laws. They fear the worst, and their worst includes a dramatic increase in the net cost of health insurance. The Office of the Actuary in the Centers for Medicare and Medicaid Services projects that health insurance will jump almost 14 percent, compared to the 3.5 percent if "Obamacare" had never been enacted.

The actuaries do project a slight reduction in premium cost increases after 2014. But that small benefit provided by the 2012 health reform legislation will occur largely because some companies that provide low-wage employees with health insurance will discontinue that practice. Critics warn that the new health reform laws will not only dramatically increase insurance costs, they will also force many medical practitioners to leave the industry. That would make it much harder to find competent caregivers, and those that do stay in the field would be available only at grossly-inflated fees.

An examination of some the provisions contained in the 2012 health reform bill does appear to warn of some costly plans. One provision states that starting a small business will not give an individual license to save money by not buying health insurance. The cost for that privilege is $750 per year. Also, being young and in excellent health may not be enough to pay for a plan that recognizes your physical status. Insurance companies won't be allowed to underwrite insurance based solely on an individual's health. Buying a health insurance policy using this new rule means smokers, alcoholics and obese people will have their premiums partially paid by healthier policyholders.

The individual aspects contained in the new health reform laws do create added expenses for individuals and businesses. That alone is enough to be concerned about how much the government can force the public to absorb. Another part of the new law demands that the pharmaceutical industry pay federal coffers a percentage of what their products sell for in the U.S. The cost of this "fee" is estimated to be around $2.3 billion annually. It might seem to even casual observers that perhaps that money could be used to develop better drugs and medicines. There are several other new rules that will extract even more billions from companies and individuals.