Recently, there has been much criticism in the media surrounding insurance companies dropping consumers from healthcare coverage due to the Affordable Care Act. Unfortunately, this criticism is misleading because no one is losing their insurance because of Obamacare. The plans that are being cancelled by health insurance companies provide substandard coverage under the requirements of the ACA. They have to replace these junk plans with newer ones which provide better coverage..
The cancellation notices have only been mailed to some of the five percent of individuals who currently have substandard policies on the individual health insurance market. More than 75 percent of Americans currently get their insurance through their employer, the Veterans Administration, Medicare, or Medicaid and are not affected by these cancellations.
Obamacare Benefits: Health Plans Should Have Minimum StandardsAll people who have received cancellation notices from their health insurance companies are gaining health insurance under new plans that meet the minimum standards of the Affordable Care Act. New Obamcare benefits that must be included in each qualified health plan include maternity coverage, mental healthcare, prescription medication coverage, and preventive care. In addition, Affordable Care Act health plans cannot drop you if you get sick and they cannot deny you coverage if you already have a medical issue.
People who have been covered under a substandard health insurance policy can choose to continue with their current health insurance company by enrolling in a more generous plan. They can also shop for affordable coverage on their state’s health insurance marketplace, where they may be eligible to receive federal premium subsidies to lower their monthly costs. The majority of Americans who are in this position will pay less for policies that cover the Obamacare benefits than they were paying for a less comprehensive plan.
Some People May Pay More
Although the federal premiums will be available to help many Americans who are losing their current substandard plans purchase better plans through their states’ health insurance marketplace, Americans who are in the higher income brackets may see their rates increase. This is because federal subsidies are only available to people who earn under a specific income as defined by the Affordable Care Act. Health plans offered on the exchange will generally be more expensive than substandard plans before subsidies because of the additional Obamacare benefits that have to be covered.
This is part of the individual responsibility President Obama mentioned in his speech that further clarified his earlier statements that Americans would be able to keep their current plans if they wanted to. People who are able to afford health insurance should receive less government assistance than people with lower incomes.
The president also said that if Americans had substandard plans that they wanted to keep prior to the Affordable Care Act becoming law, those plans could be grandfathered in. However, if an insurance company sold a substandard plan after the ACA became law, they would have to replace those plans with a qualified plan beginning in 2014. This is why some Americans are getting notices of cancellation, but in the end, the more comprehensive benefits under Obamacare benefit everyone. In general, people will be paying less for better healthcare, which meets one of the goals of the Affordable Care Act.