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The ACA and Where We Are Now

Over the last several years there have been unprecedented rate increases on nearly all Affordable Health Care Act policies (ACA). Losses have been accumulating over the last few years, and currently there is no way to stop the bleeding. However, this is the first year that real change has come to the health care market. The good news is viable options do exist and most people are not aware that they are encouraged to look outside the box. Adaptation is key in our nation’s changing healthcare system.

In 2010 the Federal Government passed our first mandated health insurance plan for most citizens under the age of 65. These changes came about from both unregulated healthcare practices and a promise to help those who could not afford insurance, or did not qualify for a plan because of health issues. Funding for this venture was redirected from the social security administration and other facets of government with restrictions how health care providers (insurance companies) could redirect the profits. The goal of this plan was to eliminate bad practices and corruption in order to help the greater good. The mandate also eliminated the practice of underwriting (verifying the prospects health to render an approval), deeming it discriminatory. The belief was that if enough people signed up for the new mandated insurance it would offset the risk of no underwriting. The powers that be were wrong.

Many healthy citizens didn’t welcome the higher premiums for a couple of reasons. Some saw this mandate as forced insurance that was against their constitutional rights. Others saw their premiums go up because of the mandate and were not willing to pay the extra cost for the greater good. Because most of these Americans decided to “self-insure” instead, or go without insurance, the system was financially doomed out the gate.

In order to cope with the losses, the participating insurers (virtually every health insurance giant in the US) starting restricting networks to the point of creating nationwide HMOs that provide little, if any, coverage outside of small networks. They also drastically raised deductibles in an attempt to help control the costs. When both of these strategies failed, as a last resort, they started increasing annual premiums to unfathomable levels, with some individuals seeing rate hikes of over 60%. Today, many ACA insurers are projected to increase their premiums by an average of over 25% for 2018, with no end in sight. In Texas, on the exchange (Healthcare.gov), the only original health insurance company left standing is Blue Cross Blue Shield. All of the others (Humana, Scott and White, Aetna, and United) have all left the state, as well as in many other states, to protect themselves from continuous losses.

Changes have already gone into effect that will permanently alter the healthcare platform. In January of 2017, the newly elected president issued an executive order to all facets of the Federal Government to not enforce any ACA mandates for any individual, business, or entity. With a republican house and senate, President Trump knew it was just a matter of time before the mandate was eliminated and wanted to give Americans open-ended options without the threat of a penalty. Whether or not the ACA continues remains to be seen. In my opinion is highly unlikely that Obama-care will be the front-runner moving forward.

Up until January of this year, secondary (term issued by the Government for those health insurance companies that would not comply with the mandate) health insurance options that refused to offer the mandated insurance had to tiptoe around the new law of the land. The Federal Government did not welcome competition and restricted certain coverages these companies offered. In order to move forward, many of these companies had to offer hybrid packages that did not resemble the mandated norm. Only a few of these companies stood on the sidelines at the start of the ACA, watching the majority of their existing book of business exit and go across the street. In fact, many of these secondary solutions ended up failing. The few that perservered haven’t encountered the losses that the ACA giants saw first hand. They stood by the belief that it wasn’t possible to eliminate underwriting and control costs simultaneously, and they were right. Today, these secondary health insurance companies are welcomed with open arms by many who do not receive a subsidy (premium credit issued by the Federal Government for those with lower income) and have absorbed the huge rate increases over the past few years. Outside of the ACA, they are the only plans with both affordable premiums and unrestricted networks. Furthermore, they haven’t been exposed to any non traditional annual rate hikes, unlike ACA plans.

There is no way to tell what the future holds with the health care industry, just a promise of change. Our current healthcare arena has arguably spurred the most controversial subject in US history. The country is divided on the differing philosophies of either compassion for the poor and sick or the necessity to stop billion dollar losses that continue to mount. Regardless of the outcome, it is evident that every citizen holds an obligation to explore options freely for their individual or family needs. Thanks to the executive order, there are now options available without the threat of a financial penalty.

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