On Jan. 1, 2014, we will enter a new era of health insurance in America, where no one will be denied coverage because of a pre-existing condition. The next six months will be challenging for employers, employees, and insurance brokers.
Universal access to health insurance is something that we should all appreciate. We will need to be patient while the bumps are smoothed out. As an insurance agent in Connecticut, providing assistance to small employers in Connecticut and New York, I am optimistic about the changes that Obamacare will deliver. Though most small businesses know something is coming, they are unsure what it will be or how it will affect them – witness the Obama Administration’s surprising July 2nd decision to delay by one year the ACA’s employer responsibility provisions.
Much that has been said about the looming and enormous changes is wrong or oversimplified. Employers fear huge cost increases, making the barely affordable unaffordable. Their workers worry they might lose coverage. What do people want to know?
Will insurance premiums skyrocket?
For some yes, and for others no. If you are a 28-year old male with a household income over $45,000, and covered under a Connecticut insurance policy, your premium will increase. If you are a 28-year old female, your premium will drop. Today, if you’re that 28-year old male enrolled in a standard Connecticut group health insurance plan, your premium with one carrier is $303 per month, but if you are female, it is $508. Beginning January 1, 2014, gender discrimination will be prohibited.
What will happen to my employer-sponsored health insurance?
Some warn that small employers will be cancelling their insurance plans. But if your employer is considering cancelling health insurance in 2014, that’s not the first time. Health insurance premiums have been increasing by double digits for more than a decade. Depending on the company’s size, rates could drop. And here is good news: If your employer had cancelled your coverage last year, or this year, you might have been unable to buy insurance yourself. Beginning in January 2014, insurers cannot deny you coverage, and cannot charge you more if you have a pre-existing condition. So if your employer cancels your group plan in 2014, you will have alternatives, for the first time. Also, you will likely have more choices than you do today.
Already, in Connecticut, one new insurance company, HealthyCT, will start offering coverage in January 2014, and a second (new to Connecticut) will start in mid-2014. So let’s consider “choice.” If you get insurance now through your employer, do you have choices? You may be offered a choice of two companies, but most likely one. Perhaps you have a choice of plans, though most likely, only two or three. Is that choice? With Obamacare that will not change, and you might have more insurers or plans from which to choose.
Will there be enough doctors, when all the uninsured people are covered?
Quite Darwinian: Others should remain uninsured, unable to obtain health protection, so I can see my doctor whenever I want? Perhaps we should solve the problem of too few doctors, rather than too many people who need healthcare. In any event, it is unlikely that the influx of more insured patients will swamp the system.
Will insurance and healthcare be changed completely?
Let’s hope so. Health insurance costs have been increasing at untenable double-digit rates for more than a decade, eased only by changes from increasing “cost sharing,” a euphemism for “the patient pays more.” Every month, I inform a client or prospective client that insurance is unavailable, or that the premium will be 40 percent higher than standard because of a pre-existing condition. That, too, will end on January 1.
Last year, before the U.S. Supreme Court’s decision to uphold the ACA, Justice Ruth Bader Ginsburg told an audience, “Those who talk, don’t know. Those who know don’t talk.” Six months from implementation of its major final pieces, it might be said: “Those who talk, don’t know; those who know, don’t exist.”
Joseph P. McDonagh, CLU, ChFC, CLTC, is an independent insurance agent with offices in Hamden, Connecticut.