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Obamacare forces changes for individual healthcare plans

Obamacare changes the landscape of healthcare

With the implementation of the Affordable Care Act or as it is more informally known “Obamacare” Americans will see big changes in their healthcare coverage, especially for provisions their individual health care plans must provide.

According to a new CNN Money report there are an estimated 15 million Americans who buy individual insurance coverage. Starting in January 2016, there will be an estimated 24 million insurance customers who will seek insurance coverage through state exchanges. Many individuals will continue to seek private insurance coverage, but starting next year both the state exchange programs as well as the private insurance plans will be required to provide a variety of new services, many of which are not currently offered by private insurers.

What will happen to private insurance plans after Obamacare?

According to insurance experts many existing insurance plans will be discontinued. For instance, Blue Cross Blue Shield who offers a wide variety of insurance products has stated they will eliminate many of their plans and instead will have a new lineup of products available for consumers in 2014 which will conform to the higher level of benefits required under the new health care laws.

What will the new plans look like? The new plans offered will be similar to some of today’s plans with coverage varying from platinum, gold, silver and bronze. Customers who want to have lower out of pocket expenses for medical care will pay the highest premiums. If customers want lower monthly costs they can expect higher deductibles and higher co-pays.

Major Health Care Law Changes under Obamacare

There are a variety of major changes under Obamacare, but one of the biggest is that now all Americans will be required to purchase insurance coverage. Failure to purchase insurance will result in a fine of $95 per adult or 1% of a family’s adjusted income with the penalties rising in subsequent years. For instance the fine will increase to $325 or 2 percent of your income in 2015. In 2016, it will increase to its highest amount of $695 or 2.5 percent of your income. Families who have limited income will receive some type of federal help to lower the cost of purchasing insurance.

Critics of the new changes claim that many people will choose to not buy coverage and will instead simply pay the fine, which most likely will continue to be substantially less than purchasing insurance coverage. Others may end up with some type of insurance coverage which does not meet their particular needs.

Obamacare’s fatal flaw

Obamacare has a fatal flaw: it needs many more healthy people than sick people to pay into the system or it will not work. But why would any healthy person purchase something they do not need, especially when insurance companies are forced to take customers with pre-existing conditions, thus eliminating the incentive for healthy adults to be insured prior to acquiring a disease or costly health condition. And if healthy people opt out the costs could rise substantially for those who need insurance.

The second fatal flaw: Obamacare created a system where customers will be forced to purchase insurance and penalized if they don’t, but the penalty for NOT buying the product is cheaper than the product itself.

I think we can all see where this is headed, skyrocketing healthcare costs and healthy individuals opting out of a broken system and paying a small penalty for their choice.
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