“Competition used to discourage insurers from providing lousy access to care, but under ObamaCare competition will reward skimping. Under ObamaCare’s price controls, insurers that gain a reputation for providing quality coverage to the sick will attract sick people and go out of business. Insurers that gain a reputation for providing lousy access to care will drive away sick people and thrive.”
“Senator Max Baucus recently admitted that he never read the new health care law. But that hasn’t stopped him from trying to re-write it after the fact, in a way that would drive more health plans from the market and give consumers less choice.”
ObamaCare forces unrealistic mandates on insurers, forcing them to cover children regardless of their health status. Instead of resulting in new health care for children as promised, companies have been driven from the market. “The insurers will no longer write ‘child-only’ policies — a small, niche market — over concern that the health reform law will make the market unstable and unprofitable.”
ObamaCare requires insurers to guarantee health coverage to children with pre-existing conditions starting on September 23rd. That will raise costs so significantly for insurers that they are abandoning the child-only market and cease issuing any new policies.
ObamaCare’s new mandates and regulations are causing insurers to significantly raise premiums or drop out of the market and cancel existing policies. This directly contradicts promises by supporters that if you like your plan, you can keep your plan. “In the letter sent to the Alcantaras and other customers, Grand Prairie-based National Health Insurance Co. said it could no longer offer individual accident and health insurance policies. It blamed its decision on the company’s inability to meet requirements of the health care overhaul signed into law this year.”
With new medical-loss ratio regulations and an expansion of government involvement in the insurance purchasing process, insurance brokers are likely to cease to exist as an industry. “Insurance agents and brokers and small insurance companies are among those who may have to scramble to stay afloat over the next few years. This is partly by design and partly an unintended consequence of a new law that is so sweeping, it will affect nearly every corner of an industry that accounts for one-sixth of the U.S. economy.”
Regulators are discussing how to write regulations governing ObamaCare’s rules on “medical-loss ratios” which restrict the operating flexibility of insurers. “Democrats prefer an extremely narrow definition, the better to hasten the conversion of insurance companies into public utilities. This political pressure is giving most state commissioners night sweats, because they’re responsible for preventing coverage disruptions and premium increases in the insurance markets they oversee. When the commissioners met last week in Seattle, they largely declined to endorse the medical loss restrictions that Democrats favor.”
ObamaCare will restrict the ability of colleges to give students low-cost health plans. “As the new law currently stands, it’s unclear whether student health plans would meet federal requirements to qualify as minimum essential coverage. If they don’t, students would have to find coverage elsewhere or pay the individual mandate in addition to the premiums of their student health plan.”
Despite promises from the President that his health care law would not make anyone lose their current health plan, colleges will soon stop offering low-cost plans to students. Since young people are unlikely to need the expensive plans mandated by ObamaCare, colleges are able to offer inexpensive plans. ObamaCare will change all that, as new coverage mandates will be implemented. “Without a number of changes, it may be impossible ‘to continue to offer student health plans,’ says an Aug. 12 letter sent to Health and Human Services Secretary Kathleen Sebelius from the American Council on Education and signed by 12 other trade associations representing colleges.”
Insurance agents are looking at the government’s plans to create insurance exchanges and are worried that they’ll be made obsolete and driven out of business. They are assuming that the fee insurance companies pay to brokers will be considered an administrative cost by new “medical-loss ratio” regulations and that insurance companies will be forced to lower those costs to comply with ObamaCare.