How the Affordable Care Act Changed the Face of Health Insurance

The Patient Protection and Affordable Care Act (ACA) has revolutionized the health insurance industry in a number of ways. Its impacts have been vast and wide.

One of the most significant impacts of the landmark legislation is the upward trajectory of premiums, deductibles, and out-of-pocket costs, especially with plans sold on the health insurance exchanges.

At the end of last year, the Robert Wood Johnson Foundation released a report showing that the costs of premiums were expected to jump in 2016, driven by those plans being sold on the exchanges.

The Gold Plans will be hit the hardest with a 13.8 percent rise for monthly premium costs while for the Silver Plans, the premium rates are expected to increase by an average of 11.3 percent across the country.

The Bronze Plan lands right in the middle, with the rate expected to reach a 12.6 percent increase. Members who have purchased health plans on the health information exchanges but are not receiving federal tax subsidies have to pay higher monthly premiums than before.

The cost of deductibles is also rising significantly in a number of states including Washington, South Carolina, and Mississippi, according to the Robert Wood Johnson Foundation.

Why have health insurance rates gone up after the Affordable Care Act was implemented? What does this mean for health payers and providers?

Many of the ACA provisions have led health payers to spend more on covering medical services among the sickest populations while hospitals and emergency care providers no longer have to manage nearly as much uncompensated care due to Medicaid expansion and the individual mandate.

However, payers have created narrow provider networks to account for elevated spending, which are causing issues regarding referrals among physicians. Consumers are also faced with higher insurance rates than before.

Source: HealthPayer Intelligence