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September 27, 2010

ObamaCaid is Now in Effect (Let's Compare What's Happened)

On September 23, 2010, the first major round of nationalized health care changes went into effect. The significant changes included, but were not limited to the following:

-Banning lifetime caps on health insurance coverage
-Eliminating fees for preventative care
-Children can stay on their parents' health coverage until age 26

Let's look at some of these:

Banning lifetime caps on health insurance coverage

While this seems like a terrific moral concept since there are Americans who have constant medical problems and need millions in coverage, there are costs. No insurance policy is unlimited in payout (whether auto, life, etc) until now. What does this do for underwriting? The jury is still out. Further, if the legislation did not close the gaps for insurance companies dropping people for ridiculous reasons, we could see an increase in such instances as companies become more determined to drop someone's coverage who is racking up expenses.

Eliminating fees for preventative care

This means that charging customers out of pocket expenses for routine doctor visits, dental, etc is now illegal under ObamaCaid. However, it is not free as it will be paid for in higher monthly premiums. There is a great unknown as to whether or not this will increase the use of preventative doctor visits or not. While there is no out of pocket expense on one hand, the other hand is that there are people out there who do not want to hear from the doctor that they are eating too much, need exercise, etc. Overall, this measure will not make us healthier and does nothing to reduce the cost of health care on the economy.

One thing we do know from the video is that there is an underwriting challenge that insurers are facing in determining costs. Therefore, we can expect monthly insurance costs to increase to cover any "unexpected" costs that insurers may face. Since the insurers are "insuring" themselves against these unexpected costs, the premium increases they charge will likely be higher than the net payouts they face. In layman's terms, people are going to be paying more for the combination of health insurance and health care than they were before the bill was passed.

Overall, my health insurance quote went from $67 per month to $91. Fortunately, I was able to cut it back to the mid-70s by eliminating prescription coverage. The net result is $10 more per month in insurance costs and less coverage. Didn't someone say rationing of healthcare services may result?

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