Aetna Inc (NYSE:AET) says consumers might shell out more premium
Northern, WI 03/30/2013 (avauncer) - The economy isn’t getting any better and healthcare premiums are all set to bog down the Americans. Small businesses and individuals are being warned by the large insurance companies such as Aetna Inc (NYSE:AET) (Current: $51.13, Up by 0.51%) about the possibility of significantly higher premiums. Mark Bertolini, the Chief Executive officer and Chairman of Aetna has said that by 2014, people buying their own policies will have to brace themselves for a premium increase of 32 percent. Followers of the Affordable Care Act (ACA) have been shunning such talks and calling them nothing but scare tactics.
Rise before a drop
The executive director of Families USA, the Washington-based consumer advocacy group, Ron Pollack has said that there is sure to be an initial rise in premiums and the projection based on statistics is also that once the line-up of subsidies are set in place and the cost-savings come into being, there will be an average drop of 60 percent in the total out-of-pocket insurance costs. Since there are two opinions as there will always be differing ones, the question that arises is, which one is on target and which is off the mark? This debate is an important one and it will eventually decide how many Americans will end up buying insurance and how many won’t.
Will affect individual buyers
These changes will affect the 15 million people who buy their own insurance against the 150 million who are covered via their jobs and employers. Effective next year, the people who buy their own insurance will be doing so via the ACA and the number is expected to hit the 26 million mark by 2020. 12 million more people will buy their policies off the exchange and all this is expected to add $205 billion to the insurers coffers annually, by 2021. Theoretically, an insurance pool that is bigger than the existing one spreads the risk over a larger customer base thus lowering the premiums. From the insurer’s viewpoint, the new revenue will in no way compensate for the higher costs as they will eventually have to pay as part of the new laws.
No insurance for ill people
Insurers are also planning on refusing medical cover to people who already suffer from medical conditions such as iabetes and cancer and will cover only essential benefits instead. These will include prescription drugs and maternity care. Older people will be the ones most affected by these changes and premiums for certain other policies are bound to increase and even healthy and young people are going to be paying higher premiums. For the moment, the effect of Obamacare remains an enigma and only time will tell whether the effect will be a positive or a negative one.