Counting Benefits of Health Care Reforms
Health care reforms have much more to offer than the setting-up of exchanges or marketplaces for buying insurance. For instance, the reforms include spending on the community health centers.
These are expenditures undertaken for ensuring that medical care delivery sites across the country,
from 2009 onwards, are increased in number and their quality of service is also improved.
Health insurance providers would have to abide by the 80-20 rule in order to ensure their compatibility with the health care law. This is a simple rule that seeks to keep a control on the manner in which the insurance firms are spending the money collected from the people in the form of premiums. For every dollar that is spent by the insurance firm providing health insurance, eighty cents should be spent on rendering some sort of health care services or improving the existing framework of their services.
The remaining twenty cents can be spent for other purposes. This rule has been at the heart of many of the bigger health insurance companies lobbying against the health care law. However, people do understand that some kind of control over the spending or finances of payers ensures better services for them and more expenditure from the payers on providing actual coverage.
Under the ACA, insurers don’t have the freedom to raise the premium amount indiscriminately. There are a wide range of mandates that limits them from doing so. For starters, every time an insurer seeks a premium hike of more than 10%, an explanation is mandated by the ACA. Secondly, insurers that are listed on the Small Business Health Options Program Exchange or the SHOP exchange apart from the state and federal exchange are faced with premium caps and the need to present an explanation every time they want to raise the premium.
Talking about the SHOP exchange—this exchange has been developed specifically for the employers and the insurance they offer to their employees. The SHOP exchange allows employers to buy group insurance coverage for their employees and seek tax credits from the federal and state government. Employers can easily compare the insurance quotes of different insurers and choose a group coverage plan that is best suited to their requirements.
It is mandatory for employers to provide coverage for their employees and if they choose not to do so, they face penalties directly proportional to the amount of tax credits or subsidies sought by their employees when buying health insurance from the Exchanges. Some employees are worried that in order to provide insurance to every employee, employers would need to spend more and their quota of employer contribution towards health insurance might dip. However, the percentage of employees who would be adversely affected by larger spread of insurance is rather small. In comparison, thousands of businesses would be able to provide health insurance to all their employees, not deny coverage on the basis of reduction in hours put-in at the workplace or remove insurance at the time of taking a leave or temporary relievement from services.
Understanding the market mood where the employers are more likely to prefer organized marketplaces for buying health insurance, many of the private payers have started adopting insurance software solutions that offer features like a dedicated employer portal and defined tabs where employee benefit management details are listed systematically.
