Health Insurance Articles

Why Health Insurance Costs Might Lower In The Next Year

2011-03-30

There has been a lot of speculation and misinformation about healthcare reform in this country. Its worse critics brand it "Obama care" and seem to be against if merely because it exists. Many complain that it will drive health insurance costs upwards as people will be forced to buy insurance and companies will cash in.

But the truth is that no one will really be forced to buy health insurance until 2014 when the entirety of the bill takes effect. The main reason the bill does not go into full effect until then is to give people time to get health coverage if they do not already have it. During this transitional period, there is actually a strong possibility that health insurance costs may in fact decrease as insurance companies compete with one another to lure in an enormous flux of new customers who will be buying insurance for the first time.

Companies may be forced to offer consumers more attractive health insurance packages at prices that are more affordable than those of their competitors. The healthcare reform mandate is expected to bring in tens of millions of new customers to insurance companies. This should mitigate any potential loss insurance companies might take by having to abide by another of the bill's provisions and extend health insurance to patients with preexisting conditions.

In order to help facilitate the sort of competition between insurance companies that could drive healthcare costs down for consumers, the government is planning on setting up new places to shop for insurance that would be known as "exchanges."

Exchanges are intended to allow small businesses and individuals to band together to get the kind of insurance package deals that insurers offer to large corporations with many, many employees.

If exchanges work as they are intended to, then it is likely they would also help to drive down the rising costs of healthcare by giving the average citizen access to lower premiums as part of the "bulk rate" type coverage extended to large corporations.

In a best case scenario for the consumer, exchanges compounded with a new level of competition for customers between insurance agencies could lead to greatly reduced premium rates for customers across the board and across the country with or without preexisting conditions.

Like most of the healthcare reform bill, what it actually means to the citizens of America is still unfolding. As the deadline of 2014 quickly approaches, people will no doubt gain a clearer picture of how the reform bill could drive down the cost of healthcare for the average family. If the bill works as intended, there is a good chance that everyone could benefit from lower premiums.