One of the hallmarks of the Affordable Care Act was to offer subsidies to help low income individuals cover their monthly premiums and be able to afford insurance. Now it’s being reported that the president is threatening not to pay those subsidies. What does that mean for you?
This year, probably not a lot. The law requires the insurers to continue to keep the premiums you pay the same. Next year, however everything could change. By how much? We don’t know yet. But premiums could go up by 20% next year for everyone—not just those on the exchanges. Plus, according to the New York Times, both Humana and Anthem are thinking about leaving the exchanges in areas where they are the only insurance company available. This would leave thousands without any health insurance at all.
It goes back to the insurance companies not liking risk—never mind that risk is the entire point of insurance. Back in my first blog I talked about how insurance was the exchange of money for risk. You pay the insurance company, they assume the risk of your health. Risk is part of their business.
Except health insurance is difference. Where someone may drive for decades without having an accident or car theft, people won’t go decades without a health emergency. Whether it’s torn ligaments playing tennis or running at the gym, or a major illness like a heart attack or cancer diagnosis, all of us at one time or another will need substantial medical care. And we will want the insurance company to cover it.
The insurance company, however, doesn’t like risk, and it likes uncertainty even less. With the threat of losing the subsidies, the insurance companies will do whatever it takes to protect themselves from risk. That means either raising premiums or leaving the risky markets all together. And that’s going to hurt your ability to pay for your insurance, if you can even get it at all.