Indiana Health Insurance
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Status of Obamacare for Hoosiers
Right now, Health Care Reform looks like it is starting to unravel. The announcement of the delay in the employer mandate raised concerns. On one side, it looks like the administration is scrambling with the implementation of the law. On the other side, the administration is starting to realize the negative impact that the mandate is going to have. The administration has had ample time not only for putting the law in place but to understand the full effects of the law.
When we look at the Health Care Reform law, we see that it is based on concepts. These concepts may or may not work in the real world. The center piece of this law is the development of the exchanges. We are starting to see what these exchanges are going to look like, and they look similar to Medicaid policies. There are going to be HMO lookalike networks. On the positive side, the premiums are going to be subsidized by the federal government.
The real life issue issue is this: will enough healthy people sign up?
It has now been proven that healthy people will pay higher premiums. This is a tough situation. Most people in their 20′s usually go without health insurance unless offered and paid for 100% by their employer. If we don’t get enough young healthy people to sign up for coverage, then the exchange will have adverse impacts or a downward spiral to death. This is a situation that would happen if only sick people take out coverage and their high claims increase premiums for everyone else. This is the main reason we are not seeing more carriers participate in the exchanges.
In the next year, we will see fully insured health premiums increase anywhere from 30%-50%. This is because the law mandates a high level of coverage. Lower deductibles, out of pockets and the essential health benefits will all add to the increase. Then add another 3.5%-7% in taxes on the premiums. We will see Indiana small businesses make decisions that are based upon these increases. It’s predicted that a lot of small business will drop their group health insurance and send the employees into the individual market. The other option is that the company may choose to self-fund their health plan. The company would then take on a calculated risk of paying their own claims up to a stop loss limit. No matter what, a tough decision will have to be made.
When we look at Medicaid, only half of the people that are eligible take the plan. Here is a situation in which people get free health insurance but don’t take it. This shows a possible flaw in the Obamacare approach. Even with artificial markets being created inside the exchanges, people still may not participate. The exchanges then turn into a high risk pool with a expiring shelf life. That is when we will have to deal with all the unintended consequences of the law.
What are your thoughts about “Obamacare” and the impact it will have on our society?