The California Association of Health Plans has released a guide describing how full implementation of the Affordable Care Act will affect health insurance in the state, the Sacramento Business Journal reports.
ACA's Effect on Individual Insurance Market
According to the guide, the ACA will have a significant effect on the individual health insurance market.
It states that the law's restructuring of the individual insurance market will lead to:
- More comprehensive benefits;
- Expanded coverage; and
- More subsidies.
ACA's Effect on Premiums
While many California residents will pay less for health insurance coverage under the ACA, some will pay more, according to the guide.
The guide lists several reasons why premiums might increase, including that:
- Insurers will pay a greater percentage of health care costs, while some out-of-pocket costs will decrease;
- People who currently have individual health plans will be purchasing policies that more closely resemble an employer-sponsored plan with more extensive coverage;
- Insurers will not be able to deny coverage to individuals because of pre-existing health conditions;
- The ACA limits the extent to which health plans can vary rates based on age, so some young adults will see their rates increase; and
- Higher enrollment by older individuals will mean higher health care costs.
Patrick Johnson -- president and CEO of CAHP -- said, "Lower out-of-pocket expenses, more comprehensive benefits and the elimination of annual and lifetime limits will ultimately help offset those increased premiums" (Robertson, Sacramento Business Journal, 4/30).
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