Health insurance premiums in America are about to jump even higher because of two key points in Obamacare.
1: By 2014 it will be illegal for an insurance company to deny coverage to a customer with pre-existing conditions. This is great news for people with pre-existing conditions, but bad news for everyone else, who will have to cover the cost through increased premiums.
2: Obamacare carries a clause in which consumers may opt out of government-approved healthcare and pay a tax penalty instead. The CBO estimates that in 2016 the average penalty will be $1200 per year.
In combination these two factors will create massive upward pressure on health insurance premiums.
Healthy consumers who carry mainly catastrophic insurance will choose to drop their coverage en masse in favor of paying the penalty.
After all, if they ever get really sick, they can always sign up for insurance because it's now illegal to deny coverage to someone with pre-existing conditions!
This will drive insurance prices higher, as there will be an ever-shrinking pool of consumers paying premiums.
I believe the long term goal is the deregulation of the health insurance market. Currently most states just have just 2-3 providers. The current providers are driving prices up because they have a, temporarily, captive market. Once more providers enter the market (because who wants to leave all that money on the table) the market should be self correcting.
1: By 2014 it will be illegal for an insurance company to deny coverage to a customer with pre-existing conditions. This is great news for people with pre-existing conditions, but bad news for everyone else, who will have to cover the cost through increased premiums.
2: Obamacare carries a clause in which consumers may opt out of government-approved healthcare and pay a tax penalty instead. The CBO estimates that in 2016 the average penalty will be $1200 per year.
In combination these two factors will create massive upward pressure on health insurance premiums.
Healthy consumers who carry mainly catastrophic insurance will choose to drop their coverage en masse in favor of paying the penalty.
After all, if they ever get really sick, they can always sign up for insurance because it's now illegal to deny coverage to someone with pre-existing conditions!
This will drive insurance prices higher, as there will be an ever-shrinking pool of consumers paying premiums.