In the next 10 years, health spending is projected to rise 6.1%, reaching $4.5 trillion, or nearly 20% of the domestic US economy. The Health Care Reforms are intended to slow down that cost progression and potentially save $60 billion over the next 20 years according to the Congressional Budget Office.
As the health care picture changes, we will continue to research the marketplace, recommend cost effective solutions, and advocate and negotiate on behalf of our customers.
Projected Cost Impacts Over the Next Few Years:
- About 30 million more Americans will enter the health care marketplace, providing many as yet unknown challenges and opportunities. Health care reform legislation was geared primarily to address the needs of the uninsured and to make needed changes to the system.
- The employer based health care system remains largely in place. Legislation affirmed the tradition of employer based and financed health care, including tax advantage benefits. Other returns on investment include coverage increased productivity, decreased absenteeism and attracting good employees.
- Small business owners will benefit from new tax advantages. Companies with fewer than 50 employees will not face any penalties if they do not offer health insurance. Companies with 25 or fewer employees with an average wage of less than $50,000 per year will be eligible to receive tax credits of up to 35% of the cost of premiums this year and up to 50% cost of premiums in 2014.
- The role of the agent will likely change over time as will the calculations for sales compensation. The current reforms have placed no limits or restrictions on carriers for paying commissions or bonuses.
- The question about insurance exchanges and the role of the agent remains open. Insurance companies may turn to the most qualified brokers to distribute even more complex products and educate both employers and their employees. There will still be a need for experienced agents.
Coverage changes within the next six months:
- Lifetime dollar limits on health plan coverage will be removed.
- The coverage age limit for a family dependent will be raised to 26 years of age.
- Rescissions of health plan coverage in all insurance markets will be removed except for those who knowingly provided untrue or misleading information on their applications.
- High-risk pools will be created for people who cannot obtain current individual coverage due to pre-existing conditions.
- Pre-existing conditions exclusions will be eliminated for children.