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Thursday, May 17, 2012
Insurers & the House Bill
The controversy on the proposed house bill heated more when it passed the House of Representatives. But even as it makes one step closer to becoming a law, the American people still need to have a full grasp of what it could bring them. Every group in the society must know what the house bill would mean for them.
Those currently having no health insurance will feel the most effect. And what should that be? In 2013, the bill will give government subsidies to Americans categorized to have low and middle income, which means Medicaid will cover wider group of Americans considered as poor. If you are in the lowest income level group, in a family of four, and earns only $29,000 a year, you will pay not higher than 1.5% of your income for the health insurance. And if you earn $88,000, feeds a family of four, you will spend for your insurance not more than 12% of your income.
Two options are available for consumers. One is the public option or the government-run insurance plan, which would penalize people of 2.5% of the income if they don't want the insurance. This will first cover individuals who don't get covered with by the small companies with which they are working for. On the other hand, larger companies may gain access of the plan in time.
What about the already insured Americans? What benefit will the house bill do to them? One of the changes the overhaul will bring is the tax. Individuals earning more than $500,000 per annum or families making $1 million or more a year will have to pay a new 5.4% additional tax. Another is buying insurance under their former employer, keeping with the old plan until the new health insurance takes effect. And of course, out-of-the-pocket medical costs will be regulated. Most individual plan holders will spend $5,000 a year, and families $10,000. Children can also remain under the parents' insurance plan until the age of 26. One more thing, insurers cannot deny coverage for pre-existing health conditions, not even drop anyone who developed illness.
And the insurers? Their long time control over health insurance stops suddenly. They will be denied the chance to continue with their most profitable practices. Insurers, for instance, cannot charge older people twice the amount young ones pay. And guess what, their business doesn't look more like a business anymore since the new customers they will likely have will not make up for the lost profit.
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