The new health care bill has caused a great deal of stir in the American insurance industry. Many companies claim that it will be the end of insurance as it is currently known and will result in a system in which patients will have to wait ridiculously long times for treatment and may never receive the same standard of care again. Still others claim that the health care bill will decimate private insurers as a publicly-regulated option muscles its way into the marketplace. While the bill was finally enacted earlier this year, many provisions are to be phased in over the next four years, and it remains uncertain if these provisions will actually be enforced in their current form.

Perhaps the most important effect that the new health care bill will have on private insurers is their responsibility to maintain a level of care as mandated and regulated by the federal government. Currently, health care providers are regulated to some extent by states, but each state has its own rules and regulations and has different standards that it demands insurance companies to observe. Some have standards of care that must be maintained for patient health and safety; some simply have a set of insurance quote and rate guidelines that must be followed. The new health care bill will introduce a requirement for all private insurers to comply with a federal standard of patient care and be subject to periodic inspections to ensure that this level of care is being met. If it is not, fines or even closure of the company could be the result. While this may affect how private insurers do business, the theory at this point is that the standard of care will be reasonable enough that all companies should be meeting it even now, or should be easily able to accommodate it. The measure has as its aim to improve overall patient care, though there is concern about the red tape that will be generated.

The new health care bill will also create a government-regulated alternative for those who cannot afford private health care. At this time, this alternative is intended to be more limited in scope than a private plan, but will allow those who would otherwise go uninsured to find some measure of security and coverage. It is not intended to create a viable system of competition for private insurers.

While the new bill presents a number of new challenges for private insurers, the hope of the current administration appears to be to create a situation in which all Americans have viable health insurance options. Only time will tell what effects the new health care bill will have on private insurers and their clients.