How The Affordable Care Act Will Affect Health Insurance PlansTuesday, June 28th, 2011 by admin
The Affordable Care Act is an enormous piece of legislation passed in 2010. It will slowly take effect over the next several years, with some aspects of the bill not taking effect until 2015. Critics and supporters of the bill have held heated debates as to how the bill will change the American health care system, but both sides seem to agree that many aspects of American health insurance plans–including their cost–will undergo drastic changes over the next half decade.
One of the most important parts of the Affordable Care Act is the effect that it will have on the maximums of health insurance plans. The act will eliminate lifetime maximums and most annual maximums, theoretically allowing for better treatment of patients. With maximums greatly extended or entirely eliminated, cancer patients and other policy holders with serious medical issues should be able to afford the treatments that they need. However, it's worth noting that eliminating maximums will likely have another effect on the health insurance plans. Rates may increase significantly, as health insurance companies use maximums to prevent large payouts and to protect their profits. Without maximums in place, many analysts expect health care costs to rise, particularly for policy holders with low-cost, low-coverage insurance.
Senior citizens will benefit from a provision in the Affordable Care Act that lowers the price of brand name pharmaceuticals by as much as 50%. This provision is intended for senior citizens on Medicare. Younger people also benefit, as 26 year old individuals will be able to stay on their parents' medical plans as a part of the Affordable Care Act. Young people will also have access to free preventative care. Both of these provisions may also raise the cost of health insurance, but the act also introduces tax credits for small business who decide to pay for health insurance for their employees. This is a strong incentive that may increase the number of group health insurance plans in the United States, thereby bringing down the cost of health insurance overall.
Over the next several years, the tax benefits for small businesses will increase as the Affordable Health Care Act becomes more powerful. A big goal of the act is to start paying physicians based on quality of work rather than the volume of patients treated. It's expected that this goal will be reached in 2015, but it's difficult to predict the success of individual measures that will be implemented to achieve this goal. The cost of health care may rise, which will have an important effect on health insurance costs nationwide, but the act's supporters claim that lower health costs will lead to better coverage for all Americans.