Day 11: Today's Important Thing to know about Health Care Reform

Today’s important thing to know is about premiums on the new ACA-compatible plans.  In previous videos, we have already covered the rich benefits that will be covered by the Affordable Care Act policies.  Some of the benefits, such as maternity and dental for children, have been benefits that were added on at an extra charge if the policyholder needed them and were willing to pay for them.  Now, those benefits are included in everyone’s premium.  Another benefit driving up premiums is the MOOP that we discussed yesterday.  Putting a cap of what you as the policyholder potentially has to pay out of pocket increases what the insurance company will have to pay.  But probably the biggest premium driver is the elimination of the pre-existing condition clause.  More claims costs mean higher premiums for everyone.  Lastly, though younger people will see a sizeable increase in premiums, perhaps as much as 30%, older Americans will be paying the same or less.  Currently health insurance companies can charge as much as five times as much for coverage of a 60 year old as a 20 year old.  The ACA limits the upcharge for age at three times.  Of course, ACA only applies to people under 65.  Don’t think the insurance companies are going to be getting rich anytime soon though.  The Affordable Care Act also capped their overall profits at 20%.  Anything over that must be refunded to their policyholders.  If you have a question you would like for me to answer, send it to me as a comment or via the contact box and I will include it in an upcoming video.