The Affordable Care Act goes into effect on October 1, 2013, when people will be able to select insurance plans from the new, federally-run options. But because the U.S. Department of Health and Human Services has not yet approved the proposed health care plans for Florida under the terms of the Affordable Care Act, residents do not have an accurate estimate of how much insurance will cost them next year. In other states, price projection has been subject to increase pending the approval of Health and Human Services, and legislators and insurance defense attorneys in Florida are worried that this state may see the same change once the plans have been finalized.
Florida’s insurance regulators predict that the federal health care reform will cause a rise in insurance premiums statewide. Projected data shows that individual health plans for 2013 will increase in cost by up to 40 percent, and small group plan premiums could be expected to increase anywhere from 5 to 20 percent from plans existing today. Although these numbers are based on hypothetical plans that have not yet been established, many state residents are facing a dramatic change to their existing plans.
These price projections do not take into account the expected government subsidies that many consumers will have available. The subsidies, based on household income, will help lower-income families pay for health insurance premiums. But the federal government can only do so much, by law, to regulate plans and premium costs, and cannot approve an insurance plan based on its proposed rates. Government officials can only evaluate a plan to make sure that it is in line with the Act’s standards.
Until the passage of the Affordable Care Act, health insurance prices had been established at a base rate, adjusted to reflect the insured’s age, gender, overall health, and financial status. Preexisting medical conditions could increase a premium for some individuals. But beginning in January of next year, everyone will be eligible for health insurance, regardless of their medical conditions. The Act eliminates higher premiums for women in childbearing years, and senior citizens will only be charged up to three times the cost of the lowest available premium.
If a premium cost is increased, Florida law requires insurance companies to explain in writing to their policyholders how much of the increase is due to the Act’s established requirements, and how much is due to other state regulations. Insurance commissioners in Florida said last month that the most likely cause of rising premium costs is this “guarantee issue”—the Act’s requirement that insurers must provide coverage to all applicants, even those with existing medical conditions. Other changes to the premium requirements may lead to overall increased costs as well, as insurance companies struggle to make up the difference with these changes.
The Affordable Care Act has made insurance available to everyone, but changes in cost will affect many, if not all, of the insured. At Florida law firm Lubell Rosen, the insurance defense attorneys offer counsel and advice to anyone who will be changing insurance plans, and may be paying higher premium costs as a result.