Healthcare costs have gotten out of control, and despite our best efforts we still can’t seem to get them under control. Even the Affordable Care Act didn’t succeed in making healthcare more affordable for most people- costs have gone up as much as 116% in some places. Many insurers are pulling out of healthcare exchanges after their profits haven’t been as high as anticipated. Costs are more than anticipated because people are sicker than they thought and plans weren’t priced according to data because the data weren’t yet available. As the pool of insurers decreases, what will happen to healthcare?
For starters, competition among those insurers in the exchange pool will go down, which will decrease competition and drive prices up. In some places consumers will only have one provider from which to choose. The cost of insurance is likely to continue to skyrocket in this scenario.
The vast majority of consumers who purchase their health insurance through exchanges receive subsidies, but for the 15% who don’t will see costs increase significantly. This means that 1.4 million people will need to shop for new plans and possibly switch to a lower cost, higher deductible plan in order to be able to afford coverage. Insurance premiums are going to rise at a higher rate than wages are expected to, so healthcare will become a larger portion of their monthly budget. With all the other increases in costs, like housing and education, most people aren’t prepared for this in their monthly budgets.
On top of the increasing healthcare costs, those who are opting to go uninsured are going to be paying higher premiums as well. Penalties are now set at $695 per individual and $2085 per family, with a maximum of 2.5% of adjusted gross income. That can be a significant portion of your overall budget, but many people are opting for this because it still costs less than buying health insurance through the exchange.
So what will happen to healthcare under the new administration? President Elect Trump has promised to “repeal and replace” the Affordable Care Act, though it remains to be seen what his exact replacement plan will be. Currently around 10 million people a year will shop for health care plans through exchanges, so figuring out how to cover that large swath of the population will be covered. Many could purchase health insurance directly from insurers, depending on how much the law is actually changed.
What will you be doing for healthcare in 2017? Most people still get insurance through their employers, so the vast majority of Americans will likely be minimally affected by any changes in the Affordable Care Act. But for those who are affected could be affected very severely and right in their pocketbooks. Learn more about where the Affordable Care Act has gone wrong from this infographic. You might be surprised just how many insurers miscalculated their entry into this marketplace and how that will affect those people in the marketplace going forward.