The marketplace for insurance through the Affordable Care Act opened on the first of October and people are already beginning to see how different purchasing insurance will be through these exchanges. With the ability to purchase insurance online and compare costs, the entire process of obtaining health insurance will become much simpler for individuals, families and small groups.
Health insurance will be transformed completely and the changes that take place on January 1st will only be the beginning of a long process of improvement in the way that Americans are insured. There are a few important ways that the exchanges will change health insurance.
1. Greater Transparency of Costs
In the past, shopping for health insurance could be confusing for people looking at individual plans. It could be difficult to compare costs between different carriers and plans and signing up required a lot of personal information. With the new exchanges, comparing prices online is simplified with more options laid out in one place and more transparency in the costs and quality of the insurance.
2. Similar Benefits and Services
With the new health insurance plans, all the insurers will be required to offer mostly the same type of benefits. This will make it easier to choose insurance based on affordability and some services that were limited in the past will become available through most insurance plans such as maternity care, mental health and prescription drugs. Coverage is standardized into tiers (bronze to platinum) and while the deductibles and copays will differ they will all provide the same level of protection to consumers.
3. More Options for Small Businesses
Insurance for small groups could often be expensive and limited to one plan for employees. The new insurance exchange will eliminate many of the extra costs that made insurance too expensive for small businesses and will expand the options available for them with greater transparency of the costs and benefits.
4. Insurance for Those with Pre-existing Conditions
Purchasing insurance in the past involved providing a detailed medical history and people with serious conditions such as cancer, heart disease or AIDS were often denied coverage because of their health problems In 2014, people can no longer be denied insurance coverage or treatment because of their health status and there will be no more medical underwriting making it easier for people with health conditions to apply.
5. Insurers will Compete through Better Quality
With all the changes to health insurance, the way that insurers stay competitive will be based on higher quality since most of the benefits will be similar. Insurers will have to include the better quality physicians at lower costs and these will be the most competitive insurance plans on the market.
The changes taking place through the Affordable Care Act will have some immediate effects as well as some long term impact on how insurance will be purchased and what type of coverage people are able to get. Overall insurance coverage will be easier to buy and improve in quality over time.
Kenneth Gray is the CEO and founder of A-Fordable Billing Solution a medical billing company that helps individuals and health care providers.