used by President Obama and his fellow democrats are faulty. The first was that
the health care law would bring down health insurance costs, and also provide
health cover for those not insured either due to financial reasons or for
According to two
latest studies, one by Society of Actuaries - a group of professionals who
manage and interpret financial risks - is that the non-employer based
individuals and families who buy insurance from the market would pay higher
The second study conducted by Covered
California - the California entity liable for setting up the state's health
care exchange - concludes that premium will increase by 14%. For families with
an income of more than $94,000 approximately, the premiums will be at least 30%
There are less
expensive and intrusive ways to resolve the health care system.
problem being, that, which affects 4 million Americans with pre-existing
medical conditions, where the premiums are exorbitant or insurers refuse to
provide them with cover.
The law has
brought about two regulations to address these issues -one - by which insurers
provide cover to everyone who applies and second - they have to charge the same
premium to all irrespective of medical history. Unfortunately these rules raise
premium costs in general.
One way to deal
with this problem is to create state based high risk health insurance pools.
These high risk pools generally offer a choice of plans and enrollment is
limited to those unable to afford any other coverage. These plans will be
isolated from the health insurance marketplace so premiums are not increased
due to these plans.
These high risk
pools must be properly funded and according to a study 3 years old a
comprehensive set of high risk pool programs would cost $15 - $20 billion a
Because high-risk pools are
isolated from the broader health-insurance marketplace, they don't increase
premiums for those outside the pool. It amounts to a fraction of the amount The
Affordable Care Act estimates in its spending.
The federal government should
ensure that state-based, high-risk pools are properly funded, which should be
regularly reviewed to ensure adequacy. Also states should have rules to prevent
both insurers and individuals from improperly taking advantage of the high-risk
Rather than distort the
marketplace and increase the cost for many Americans, reforms that use the
market force to reduce costs should be explored.
Hannah Punitha (IRDA Licence Number: 2710062)