Will State Run Medical Coverage Make a Difference?
Things are not looking good for many individual health insurance plans, particularly in the wake of the passage of the new healthcare bill. First insurance companies announce the cancellation of individual policies for children, and now in New Mexico some companies claim they will discontinue individual medical coverage
plans for anyone.
Well, the answer to that question depends on who you ask. Insurance companies say that the requirements from the new healthcare bill
are making it too expensive for them to offer individual health insurance. The new law forces them to expand medical coverage by offering it to children with pre-existing conditions. Insurance companies don't want to pay for expensive treatments, so it saves them money to cancel all individual policies in the state.
The new law also forces insurance companies to spend a minimum of 80% of their revenue on actual medical care, another stipulation in the bill that insurance companies feel is too difficult to fulfill.
Industry opponents argue that insurance companies are waging a war of public opinion, trying to frighten the public into thinking that the new healthcare bill will mean no coverage for anyone. The first attempt at this type of maneuver would have been the astronomical price hikes that many men and women saw in their individual health insurance
Some companies predicted a rise in premiums of up to 39%.
Individual Health Insurance
Did you know...
Some individual medical coverage plans in New Mexico have been cancelled completely?
However, other insurance companies did not predict such rises in costs, leading to conflicting reports regarding how much the healthcare bill will actually impact the companies.
Regardless, state-based insurance exchanges set to be up and running in the year 2014 have been touted as the solution to this problem. Individual health insurance and small business health insurance tend to be very expensive to begin with, and the state-run pools are theoretically designed to offer coverage to these same groups at affordable rates.
Men and women will be able to shop in the state-run market for medical coverage that suits their needs; the hope is that this will encourage a more competitive insurance market, and leave the decision-making when it comes to types of coverage to consumers.
However, whether or not this will work is still contested. These state-run insurance markets won't be available for another 3 years, and that's a long time to go without coverage if your individual plan has been cancelled. There is also concern that the healthcare bill will be modified significantly or repealed entirely before it can lead to significant benefits in the first place.