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By: Wiley Long
The Obama administration just finalized health care reform rules to keep health coverage rates down. Starting in September, Texas health insurance will have more regulation to deal with when trying to increase premiums on individual and small business plans.
Large employers' health insurance options won't be affected by the new rules yet, but officials plan to seek input on whether to expand the rules to what are known as "association health plans." That refers to policies that are pooled together in large groups.
Rate hikes on Texas health insurance plans may be reviewed by the state or the federal government. Although insurers will be called upon to explain the need to raise premiums, the federal government doesn't actually have the authority to block increases. Many state regulators, however, already have that power. Some that don't are pushing to get it.
Will Health Insurance For Texas Really Change?
For the state of Texas, health insurance companies may see a big difference. Before this fall, the Texas Department of Insurance was not requiring insurers to justify rate hikes unless there was a 50-percent increase from one year to the next. In fact, the old law did not even mandate that the department review rates or compare them to any standard.
The days of rate hikes appearing in your mail box with little or no overview may be gone. The new scenario prompts insurance companies to outline their spending for administrative costs and medical services, and takes a look at their profit margins.
Texas health insurance companies are likely to notice a major shift. According to the secretary of Health and Human Services, "Recently, insurers have posted some of their highest profits in years...and they continue to raise rates, often without any explanation or justification." Kathleen Sebelius says, "The framework of the Affordable Care Act is beginning to change this."
Should Texas Health Insurance Quotes Be Lower?
While premiums have continued to rise, sometimes by 30, 40, 50 or almost 60 percent, some insurers have been spending less on medical care. Without the means to meet co-pays or deductibles, policyholders have cut back on health care during the ongoing recession. That's unlikely to reverse until unemployment is resolved.
Now that health insurance plans in Texas purchased after the passage of health care reform provide preventive care at no cost to the policyholder, long-term costs are further expected to be curbed. Of course, insurers will initially spend more on preventive services like annual exams, but that's a tiny fraction of the cost to treat illness that has progressed unimpeded.
Cash-strapped consumers now have access to see their doctor yearly. It's cheaper for the policyholder and the insurer to spend minimal amounts to treat disease early on than to spend exorbitant amounts that may or may not save lives once a disease like cancer has progressed.
Are Insurance Companies In Favor Of Health Care Reform?
Despite the opposition of insurers to regulation, they sometimes argue for reform whether they realize it or not. For example, the head of America's Health Insurance Plans says, "Premium review must adequately factor in all of the components that determine premium rates, including geographic variation, the cost of new benefit mandates, and the impact of younger and healthier people dropping coverage."
By requiring most U.S. citizens to carry minimal levels of health insurance, health care reform prevents young, healthy individuals from opting out. That's the basis for universal coverage in most of the developed world. Share the cost so that the impact of caring for the sickest among us is spread across the total population.
As to any variation in geographic medical costs, states will develop their own thresholds to take into account regional conditions in the coming years. The 10-percent increase standard is just a starting point.
Some consumer groups have taken issue with that as well. They have written the secretary of Health and Human Services calling for additional measures that would review premium hikes that are not justified by medical treatment inflation.
Author Resource:->??By Wiley Long - President, eTXHealthinsurance - Texas's leading independent online health insurance agency specializing in individual and family Texas Health Insurance.? Get instant Texas Health Insurance quotes, compare plans, apply online, and save your hard earned money!
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