It is considered unwise not to invest in a health insurance. After all, one health issue may take away all your hard earned savings in no time and still leave you with a huge sum to payoff. This again leaves you in a position you previously were. You are again unable to cover your healthcare costs even after the money you have invested and with the latest news surfacing about the rise in cost of insurance premium, there is a lot of worry coming your way.
Average health insurance cost has been the primary concern for many young adults. However, a few changes in the policies adopted by President Obama’ healthcare, popularly called Obamacare are becoming a reason for the insurance companies to raise their insurance premiums.
Many insurance companies now have to admit even sick people to their policies and they cannot charge senior citizens a higher rate of interest. Therefore, whether you are young or old, your insurance premium will be a matter of your need and not your age. This, as being stated by many sources, has scared a lot of insurance companies and they have now started believing that in order to cover their costs and maintain their profits, they have to increase the premium in double figures.
This is being called the ‘premium rate shock’ and the health insurance provider companies are planning to increase their premium by as much as 15 to 20 percent. This is an important thing to be kept in mind as the premium cost for an average family has already gone up by as much as $3000.
This will strike young adults the most. The insurance laws declare the rate of insurance that can be charged from a person of a particular age group. A senior certainly spends more on healthcare on an average than a young adult. So if the insurance has to be taken on flat rate, the younger people end up paying more, covering the cost of the seniors as well. Moreover, Obamacare has also made a few ‘mandatory’ health benefits for the insurers.
On the other hand, Obamacare is also providing subsidies to the people. It claims to cover most of the average health insurance cost being increased for premium and also hopes that the rate of rise in the insurance cost will not run as fast as it had in the previous few years. A report authored by Kurt Giesa and Chris Carlson in the bimonthly magazine of the American Academy of Actuaries, Contingencies, states that the average cost of healthcare will definitely rise for the Americans and that they will get ‘exposed’ to rising healthcare costs.
Most of the people blame the ‘Community Rating’ provision in healthcare which makes the younger Americans pay more for covering up the cost of insurance for other age groups. Low income insurance cost will also not see a very promising future as being younger can take the toll on your already crunching financial situation.
It is estimated that the insurance cost being paid by an ‘average, young and healthy’ American could triple after the healthcare overhauling is complete. Low income health insurance might become problematic for the people. For someone who is in his twenties and is not earning enough to fulfill all his needs, it might become difficult for him to even think about being covered for health insurance. This means that if enough ‘young’ people are not signing up for health insurance, the whole policy can come to a disastrous end.
People are also being covered for what they do not think they want under the mandatory health benefits being received by every insurance holder. You have to pay for this as well. This can be a blow for people who are looking for low income health insurance options, especially in the private sector. Political adversaries also claim that the millions of dollars being spent on subsidies can be better employed to come over recession.
To strike a different chord, this increase in the rate of average health insurance cost, also seems like a bubble soon to be ended. Some people, especially Obamacare supporters and a few market researchers claim that the term ‘rate shock’ has been deliberately designed by the insurance companies to scare the average insurance holder and make him pay more. The fear-tactics being implied by these companies is being given further air by political adversaries and it is meant to create a negative propaganda against the Obama Government’s healthcare policies.
Whatever the case may be the truth remains that all the families and individuals will end up paying more insurance premium by 2016. However, most of the cost will be covered by the healthcare subsidies; it still remains a speculation that the cost can rise as much as 3 times the normal cost. Time will be the best judge in this case, but young adults are warned to take a good look at their finances again.