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Health Insurance Prices Rise and American Healthcare Coverage Falls

In a year’s time, insurance prices rose by an average of just over 20 percent around the country, and as a result of this increase, people who qualified for Obamacare held onto their insurance. However, for Healthcare Insurance Holders who earned too much to qualify for Obamacare, many Americans made the choice to drop their insurance to save costs. 

According to a new government report, about a million people appear to have been priced out of the market for health insurance last year.

The report is the first comprehensive look by the Department of Health and Human Services at people who buy their own insurance but don’t qualify for federal subsidies under Obamacare in 2018. Americans who earn less than $48,000 (the National Median Avearge Salary is 59,055 in 2018) are required to pay premium for their healthcare plans. However, the price increase does not stop there. This group of Americans are looking at up to three increases in the cost of Healthcare in 2018 alone. 

Possible reasons for this lack of enrollment are up for speculation. Due to lack of advertising for insurance sign up periods, The Trump Administration made it more challenging for people to sign up for insurance later in the year. This lack of advertisement resulted in Americans to miss the sign up period, and without being able to sign up later in the year, they are without insurance. This is a probable cause as to what caused this decrease in insurance enrollment in 2018.

On the bright side, this change in healthcare purchasing can also be a result of Americans being hired for jobs that offer healthcare and therefore do not need to purchase health insurance. 

The Affordable Care Act (ACA) ended the practice of using a small group claim experience to set rates, and instead used a practice called “community rating”, which requires insurers to pool the risk across all of their small group business in a given geographic area. This resulted in Americans in certain income demographics to either be able to purchase healthcare insurance or receive it through their employer; however, it did result in higher prices for those not fortunate enough to work for an employer that offers benefits, are contract workers, or freelance employees. 

The Obama Administration frequently published information about enrollment in the official marketplaces, where more than 80 percent of customers qualified for subsidies each year. Although those numbers sound great, researchers had been relying on non-verified estimates from the insurance industry about enrollment from those who bought coverage directly. As the saying goes, one should verify with two sources before deeming it fact, and this proves to be a case of only checking with one source and running with the good news. The new report provides more official, and verified numbers on those who bought insurance themselves. It shows that signups among people who didn’t use a subsidy fell by 1.3 million people between 2016 and 2017, which was the most recent year with verified figures.

The Trump administration, however, has assured Americans that rising healthcare prices are the explanation for the decrease in enrollment among higher-earning customers.

However, the Trump Administration continues to make actions that increase the likelihood of higher costs for comprehensive health insurance, which in turn makes the markets even more unpredictable.

The new administration cut its budget for Obamacare advertising and enrollment assistance in 2017, as well as eliminated payments to insurance companies meant to help offset the cost of covering their lowest-income customers. This is a probable reason as to why this change resulted in a deficit of American Insurance holders in 2018.

The Trump Administration has several other tactics that can possibly weaken the Obamacare markets. Since January of 2018, people who fail to obtain health insurance will no longer need to pay a fine. The administration recently released a rule allowing more self-employed Americans to buy association health plans, which are not subject to as many rules as Obamacare plans. This is a benefit to many small businesses, and can in turn help get more coverage for Americans without the high costs. 

A new proposition is a “short-term limited duration” insurance, which can include fewer benefits and can reject people with a history of illness, is expected to be made final soon. This option is a viable option for lower-income health insurance customers that were affected by the price increases in the Obamacare markets.

However attractive this short-term policy may be, this plan will only be useful for people who are initially healthy enough to qualify for the new plans. The new plans and the repeal of the fine will possibly push healthier customers out of the markets, and raise prices for those who remain. According to the Congressional Budget Office, the policies will raise insurance prices by more than 10 percent.

The good news lies with lower-income customers, as those who qualify for subsidies won’t have to worry about costs. However, the middle-income consumers who pay full price for what appears to be increasingly expensive healthcare coverage, will be subject to premium costs and possibly left with difficult financial decisions to make.

If these customer’s health history disqualifies them from markets for association or short-term plans, Trump Administration policies are more likely than not to leave them with premium prices for mediocre coverage. 

With all of these changes in plans and coverage costs, it is best to refer to an Insurance Broker like Florida Healthcare Marketing before making any decisions regarding healthcare. Our services can help you find the best, most cost-friendly option for you that will make your employees and wallet happy.

We look forward to working with you and seeking the very best employee benefits option for you and your small business! If you’re interested in exploring your healthcare options, leave us a comment or reach out to us for more information!

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