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Health Insurance Costs About to Rise

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Healthy consumers may see insurance rates double or trip when they look for individual coverage under the federal health law later on this year. The premiums paid by sicker people are set to become affordable, according to Wall Street Journal’s analysis of coverage based on the law’s new exchanges. The exchanges, which are the centerpiece of President Obama’s healthcare law, look more likely to offer few of the cut-rate policies that healthy people can purchase, based on information from the Journal’s analysis. At the same point, the top prices seem to be within reach for many people who used to face undeniably high premiums due to chronic illnesses -- or those who were not able to purchase insurance at all.

Several large provisions in the law taking effect in six months will affect the rates for the estimated 20 percent of Americans who don’t have coverage through their employer, Medicare, or Medicaid. Plans should be available to consumers regardless of their health and must cover items such as maternity care, hospitalization, and prescription drugs. The exchanges are set to open October 1st, selling plans effective by January 1st. A review of the rates proposed by the carriers in eight states shows the likely boundaries for the least expensive and most costly plans on the exchanges. The lower portion is important because the government will want to attract healthy people to the exchange, and that my choose to pay a penalty and take a risk of going without coverage if they feel that they can’t find an acceptable bargain.

For a 40 year old single nonsmoker in the middle of the age range eligible for exchanges, a bronze plan covering around 60 percent of medical costs will be available for around $200 a month in most locations according to proposals. Though less generous than the silver and gold plans that are offered, a bronze plan would include fuller benefits than many policies available on the individual market today. The challenge for this law is that healthy 40 year olds can generally get coverage for far less. This is especially true for those who are willing to accept far fewer benefits or even take on more costs on their own. Supporters of the law claim that tighter regulation on insurance practices will give consumers more protection and will be worth the extra cost. However, they will still have to convince people who don’t have an immediate need for healthcare of this consideration. If only sick people buy into the new insurance options, the prices could become even more expensive.

The law is considered more likely to offer a benefit to those who have difficulty getting insurance now or those who are pushed out of the market because they have had illnesses. Under the current system, the rate on the $63 a month plan could be revised higher if consumers indicate that they have had prior health problems based on the medical questionnaire that has to be filled out before purchasing into the plan.