Health Insurance Articles

Understanding How New Legislation May Affect Your Health Insurance Quotes

2010-12-20

Congress' new legislation regarding health care means changes are coming. Though many provisions don't go into effect for two to four years, some aspects of health insurance coverage will change almost immediately. People obtaining health insurance quotes may notice increased premiums and co-pays.

One of the biggest changes created by the new health care legislation is that it prevents insurance companies from dropping people who get sick, or denying health insurance coverage to people with pre-existing conditions. Insurance companies are also prevented from charging higher premiums based on a person's health condition. Though adults won't be protected in this way until 2014, the new changes already apply to children. The result, according to the Congressional Budget Office (CBO) is that insurance premiums will begin to rise and will be 10 to 13 percent higher by the year 2016 than they would have under current health care law.

Premiums may increase, but more people will qualify for subsidies, which means that despite higher health insurance quotes people may still pay less than they're paying now. Others will get assistance via tax credits. For example, a family of four with a household income of $88,000 or less would qualify for tax credit aimed at helping them pay for their health insurance.

Beginning in 2018, a 40 percent excise tax will be levied on high-value insurance plans whose premiums are, for example, $27,500 or more for a family of four. The tax will be levied on insurance companies, who are expected to pass that cost onto consumers through either reduced benefit amounts or higher premiums.

Health insurance quotes will also be affected by new state-run insurance exchanges scheduled to be up and running by 2014. The exchanges are intended to create a "pool" of customers who, by purchasing insurance together, get lower premiums. People can participate in the exchanges if they are buying insurance on their own (not through an employer) or if the insurance offered by their employer either costs more than 9.5 percent of the person's income or pays for less than 60 percent of health-related costs.

Currently, people who are considered "high risk" often have trouble getting affordable insurance. The new legislation addresses this issue by creating high-risk pools through which people can purchase insurance. Premiums are expected to be higher than average for this group, simply because it is comprise of high-risk people, but buying insurance as a group is expected to keep premiums lower than they would be otherwise.

The new health care legislation means changes for just about everyone. Fortunately, the changes will be rolled out over the next several years, giving people time to learn and adjust.