This is the second in a series of weekly blogs by Marcus Rey Williams MD, addressing major concerns of readers regarding healthcare reform. Dr Williams will relate relevant, up-to-date, and hard-to-find information throughout the series, which will run weekly through the end of December 2013.
Will My Health Insurance Survive The Changes?
When President Barack Obama’s second term comes to a close and his successes and failures are written about in history books for years to come, no subject will be discussed quite as much as the Affordable Care Act. Also known both derisively and affectionately as “Obamacare,” the Affordable Care act is the most significant overhaul to the healthcare system in the United States since the original passing of Medicare in 1965. The Affordable Care Act, on the surface, aims to lower the prices of health insurance in the country and lower the rate of insured individuals by making high quality, affordable packages available to those in need.
When the Affordable Care Act was still being hotly debated before it officially became a law, its chief supporters and even the President himself assured the American public that anyone who was satisfied with their current insurance coverage would be able to keep it. Obamacare would make high quality insurance available to everyone, regardless of pre-existing conditions that would have excluded them in the past. If you were happy with the insurance coverage you had either through your own research or through an employer, it was said that you would notice no differences once mandates went into effect. Now that the Affordable Care Act is close to becoming a legal requirement for many Americans, those statements don’t necessarily appear to be true.
Three months after the original approval of the Affordable Care Act, a rule was issued that stated current insurances could not be “grandfathered in” (and people who had them would be dropped by their providers) if they included changes to benefits packages that were issued after 2010. The Affordable Care Act dictates that all insurance policies need to meet minimum requirements to be considered “high quality” packages. Any policies below the high quality threshold would quickly be considered forfeit and those who were enrolled in them would need to look elsewhere for coverage.
Some sources predict as many as 25% of all individuals who lose their healthcare under the Affordable Care Act would come from small businesses, while as many as 10% of the losses would come from large employers who submit their existing policies for grandfathering consideration, only to ultimately be denied. An increase in healthcare prices overall for those affected could cause employers to either abandon plans or convert full-time employees to part-time status in an effort to save as much money as possible.
The major discrepancy between statements originally made by the President and the reality of the situation comes by way of the new regulations that set standards for insurance. While many changes are for the benefit of everyone, including a ban on a healthcare provider’s ability to drop a person if they become sick or for discriminating against people with certain pre-existing conditions, other changes are dramatically affecting people’s abilities to keep the coverage they already have. Though it is estimated that the total number of people getting dropped from existing insurance policies will affect only as few as 5% of the American population, when the total number of people living in the country exceeds 300 million individuals, the 5% number is still quite large.
One of the reasons that people are seeing employer-provided healthcare scaled back is due to an employer mandate in the Affordable Care Act. The act states that a penalty will be assessed to employers that have more than 50 employees who do not offer health insurance to workers with full-time status. Because quality health insurance under Obamacare can be a more expensive than previous plans that were available due to the high quality threshold, employers may be forced to drop employees down to part-time status to avoid paying for health insurance for those individuals. Because the act does not have a penalty for small businesses with less than 50 full-time employees, the law is in essence incentivizing businesses to drop the number of working hours allotted to each employee to save money on the health insurance mandate.
The question of whether your current insurance will survive the changes of Obamacare is a complicated one. If your current policy does not meet the high-quality threshold required by the Affordable Care Act, it will in essence cease to exist when the law goes into full effect in 2014. As a result, you would be dropped by your provider (as it would become illegal to offer such a policy under the new rules) and would be required to find similar coverage in the health insurance marketplace, which could potentially cost more money. Additionally, if you work for a small business that is now required to spend a lot more money in health insurance, your employee could drop you to part time status to avoid paying for a policy altogether. Though the percentage of Americans affected by those situations is in the single digits, with a population as large as the United States they could still affect millions of people throughout the next few years. If your current situation is like the ones described, it is very likely that you will be affected by the changes mandated by the Affordable Care Act. If you work for a large business or have an existing high quality health insurance policy through either your employer or through your own personal situation, it is unlikely that you will be affected at all.
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Marcus Rey Williams MD, is a board certified Internal Medicine physician
and medical director of NewPath MD, P.C. www.newpathmdpc.com
Located In The Exton Medical Arts Building
80 West Welsh Pool Road
Exton, PA. 19341-1225