Individual health insurance rates for healthy customers could double or triple when the health law goes into effect next year, according to a Wall Street Journal analysis.
The Patient Protection and Affordable Care Act will require most Americans to acquire health insurance and bar insurers from denying coverage or charging exorbitantly high rates to those with pre-existing conditions. As a result, the newly mandated healthy customers who purchase health insurance on the individual market instead of through their employers may need to pay higher premiums for insurers to be able to pay for the costlier customers they are now required to accept, according to the analysis.
WSJ analysts reviewed insurance rates to be offered on the health insurance exchanges in eight states. In one example, a hypothetical nonsmoking male in Richmond, Va., today could purchase health insurance through Anthem for $63 a month with a $5,000 deductible. Under post-PPACA rates, the same plan for the man would be about $193 per month.
Subsidies as high as $234 per month are available to near-poverty Virginians to afford plans on the exchanges, but eligibility for those subsidies dries up at annual incomes of about $33,150, according to the report.
Many speculate that prices will come down as competition grows on the exchanges in the coming years, according to the report. Also, the PPACA has already established a medical loss ratio cap on health insurers that requires them to spend at least 80 to 85 percent of total revenue — depending on the type of customers — on medical expenses or reimburse customers with rebates or credits on their next plan year.
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