The recently passed health insurance reform law will touch most Americans. A major change affecting individual health insurance is a prohibition on denial of coverage for preexisting conditions. Of course, there is the requirement for all Americans to have insurance. Insurers are also prohibited from putting yearly and lifetime coverage limits. There is the group health exchanges to come that could lower policy costs. Hence, the Obama effects on individual health insurance will impact the biggest shortcomings in the prevailing market for individual health insurance.
The health care reform bill was undertaken during a time when insurance rates keep on climbing, Americans are aging, Americans are losing coverage and Americans have increasing poor eating habits. A report released by the Robert Wood Johnson Foundation in March 2010 revealed that members of the middle class are losing health insurance faster than any other income group. Between 2000 to 2008, middle income earners who were covered by employer provided health insurance declined by three million. The report revealed that 66 percent of people in families earning between USD 45,000 and USD 85,000 were insured through an employment based plan. People who earned were more likely to lose employer coverage, but also more likely to be covered by a government program like Medicaid. Only approximately half of the loss in employer provided insurance for middle income earners was offset by government insurance programs. Those who missed the safety net had no option but individual market, where insurance companies have denied coverage based on preexisting conditions and charge high and ever increasing premiums. Hence, until the health insurance reform bill, for these middle class Americans, the individual market was not a real option.
Insurer placed limits on coverage was a major hurdle in the expansion of the individual market. Other major challenges were affordability and adequacy of coverage. One study has shown that conditions denied coverage varied according to the insurer. At the same time there is no bar on what insurers may levy.
Of those who do buy their own insurance the health insurance market works well for some; but, not for others. In the individual market prior to the reform bill, in order to lower their risks insurers preferred the healthiest applicants. In most states, insurers may consider the health history of the applicant in deciding coverage and its cost. Unlike group plans offered by employers which provide coverage to everyone, there is no guarantee in most states individuals can obtain insurance. It has been realized that solving problems in the individual market would improve the health care crisis. In California, Connecticut and several other states regulators have taken actions against insurers who revoked individual coverage after policyholders fell ill. Before the President won the election Senators Ron Wyden, a Democrat from Oregon, and Bob Bennett, a Republican from Utah were supporting a bill that would shift workers getting coverage through employers to purchase their own insurance. The intention of their proposal was to break the link between employment and insurance. The two supporters of the bill believed this would let people keep their coverage even when they lost or switched their job. The proposal would have required everyone to have coverage and insurers to sell insurance to all applicants. The health reform bill has addressed these failings. Both presidential candidates had expressed the desire to improve options for people who buy their own coverage. Candidate Obama wanted to allow individuals and small firms to have the bargaining leverage and purchasing power of latge firms by creating ways for individuals to buy insurance in groups. Advisors to candidate McCain had acknowledged the current system was broken. Douglas Holtz Eakin, who was a senior policy adviser noted that he did not want to give the impression the individual or small group market is a good place to be, as it was not
The health care crisis in America has had a crippling effect on public hospitals around the nation who have borne the brunt of taking on those denied health insurance. There are 1,300 hospitals today which is 300 fewer public hospitals than the number 15 years ago. Emblematic of this plight is Grady Memorial Hospital in Atlanta that faced closure despite being a lifeline in a region where it provided charity and emergency care that neither the counties, the state nor the federal government was willing to cover. A third of the patients at Grady are uninsured, another third is covered by Medicaid, which reimburses at rates well below actual costs. Whereas, some hospitals have offset the costs indigent care with privately insured patients, here a minority of the patients fit the privately insured category. In Atlanta, as in other cities, better financed hospitals win over the market of patients with good insurance coverage, leaving public hospitals with mainly the under insured and those lacking insurance. Over the years, the cost of caring for the uninsured and under insured has risen; while taxpayer support has not kept up.
Currently employers are looking to shift more burdens to their employees due to rise in the cost of health insurance. A Reuters research team in analyzing claim data has discovered that smaller employers saw costs rise the most. According to a report released in March 2010, the cost for an employer to offer individual plans to workers increased by 43 percent over a eight-year period. The amount employees paid for the single plans increased over 64 percent.
Large corporate employees have enjoyed the most secure and highest quality coverage in the nation during their employment. They have not been victimized during their employment with revocation or denial due to preexisting conditions. Nevertheless, a recently released annual survey by the National Business Group on Health has indicated that the impact of rising costs means this island of safety is about to be buffeted. This surveyed large employers indicated they were considering shifting more of the cost on their employees.
As indicated by a study carried out jointly by Harvard researchers illness led to majority of filings for bankruptcy in a year preceding the housing bust. The majority of filers had insurance insured and most of them were middle class and college educated. They lost their jobs due to illness and with it their insurance. The study revealed that you are a serious illness away from bankruptcy. Insurance policies may offer little help when a serious illness strikes. Bills that were not paid by insurers averaged over 10,000 dollars for those with private insurance. There are big Obama effects on individual health insurance coverage.
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