Health Insurance for the Rich
“To sum it up…”
- When enacting the Affordable Care Act, the Congress focused on adding to the ranks of insured Americans
- The ACA reforms made it easier for everyone to get coverage regardless of income and wealth
- The Affordable Care Act extended health insurance to low-income persons
- The Affordable Care Act expanded Medicaid to provide insurance to those that cannot pay premiums
The Obamacare health industry reforms helped every American family including the most wealthy. The commercial health insurance industry is a risk adverse business. Before the Affordable Care Act, insurers used medical underwriting to determine insurability for individuals and families.
Medical underwriting potentially excludes persons with any of approximately 400 medical conditions. Health insurance for the rich or poor was deniable based on factors largely out of the individual ‘s control such as genetic predisposition to illness or disease.
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The Need for Reform
Before the Affordable Care Act, spending a lot of money in health insurance was no guarantee of good, or adequate, coverage. Modern medicine in the US offers high-quality care and an amazing range of advanced technology and medical science. The costs can be just as amazing.
For example, vital organ transplants can easily cost more than $500,000 and an additional similar amount in top tier prescription drugs and immune suppressants. A simple appendectomy that involves a hospital stay can exceed $100,000.
Unregulated Health Insurance
Much of the insurance sold on the pre-Obamacare marketplace had inadequate coverage, annual and lifetime benefit limits, and carve-outs for cost intensive treatments. Many insured consumers encumbered burdensome medical debt when insurance failed to cover foreseeable risks and costs.
Obamacare required the below-listed protections for everyone.
- Added essential health benefits to every qualified health plan.
- Banned annual and Lifetime limits on essential health benefits.
- Required all policies to have minimum essential benefits.
- Required all policies to limit deductibles and out-of-pocket expenses.
- Limited exceptions to community rating so that insurers cannot charge higher rates for individual traits.
Deductible limits and Out-of-Pocket Expenses
The fundamental reforms of the Affordable Care Act include limits on annual amounts insurers can charge consumers for expenses. Wealthy individuals benefit from this limit, and the insurer pays the full cost of benefits after the consumer passes the spending limits.
Wealthy individuals have the same right to Medicare coverage as persons with little or no income or wealth. Wealthy participants in Medicare pay taxes during their work or business careers and have earned eligibility for Medicare Part A: Hospitalization, Part B: Medical Insurance, and Part D: Prescription Drugs.
Once eligible for Medicare, wealthy persons can choose a comprehensive Medicare Advantage plan.
Medicaid, CHIP, and Medicaid Expansion
A near majority of Americans at some point use Medicaid or another social safety net program for medical care.
These programs use a means test and an income limit to determine eligibility.
Wealthy persons earning more than the 400 percent of the poverty line rarely qualify. However, temporary situations can occur for anyone. Further, the social safety net protects everyone whether we use it or not–it is there for the unforeseen contingencies.
Qualified Health Insurance
Obamacare improved health insurance by requiring quality coverage. To avoid the uninsured penalty, policies must have a minimum value of 60 percent, minimum essential coverage, expense limits, and essential benefits.
Essential Health Benefits
The 10 essential health benefits transformed health insurance in favor of consumers Policies had to provide the types of services that individuals and families need such as maternity benefits, ambulance services, vaccines, and annual screenings.
The individual mandate required every eligible person to get and keep qualified health insurance. The mandate applied to every eligible person without regard to wealth with the exception for those that did not meet the minimum tax filing threshold.
The mandate applied to wealthy individuals as with other eligible residents. Those without coverage or an exemption faced the uninsured tax penalty.
Eligible applicants get guaranteed issue for health insurance during the open enrollment period. Insurers must accept every eligible person. Nearly all lawful residents with enough annual family income to pay premiums are eligible for insurance during the open enrollment period.
Obamacare was not social insurance, and it was not universal coverage. The people who could not afford to pay the demands of private insurance premiums could not get Marketplace policies.
Low-income families could not afford the Affordable Care Act Marketplace and state exchanges because private insurers priced policies out of their reach.
The consumer oriented insurers (COOPs) could have changed that dynamic. Obamacare expanded Medicaid to cover the gap between Marketplace minimum income and Medicaid maximum income limits.
Wealthy individuals as defined by the ACA are those with incomes greater than 400 percent of the federal poverty guideline.
Wealthy individuals can purchase health insurance on the Obamacare Marketplace and the state exchanges. They will likely not qualify for federal tax credits or other costs reduction subsidies. They can get advice and assistance from trained staff when evaluating Marketplace policies and options.
High-end employer or union sponsored health plans benefit persons that can afford to pay high premiums or who benefit from lavish sponsored health plans. The Affordable Care Act put a 40 percent levy on the insurers that offer such plans. The current status of the penalty is doubtful as nearly every important healthcare stakeholder opposes it.
High-end plans offer generous benefits with few if any fees, copays, or coinsurance.
The impact on the health services marketplace creates upward pressure on prices and reduces the availability of services in a local market. The policy behind the penalty does not seek to punish wealth but to limit excess.
The Affordable Care Act seeks to empower consumers to act on their behalf by comparison shopping and getting the best value for their healthcare spending.
Shopping Outside the Marketplace
The principles and reforms of the Affordable Care Act appear in every qualified insurance policy sold in the US. Wealthy individuals can go to brokers, agents, and direct to insurance companies to shop and buy policies. They can get additional benefits and protections above standard terms for negotiated prices.
Comparison shopping is an ideal tool for finding high-value policies that respond to a consumer’s individual or family situation.
Healthcare for the Rich
The Affordable Care Act enabled millions of Americans to get health insurance coverage despite pre-existing conditions that would have disqualified them before 2010. The reforms helped wealthy individuals get coverage by banning the use of medical underwriting, requiring universal acceptance of qualified applicants, and requiring insurance policies to meet minimum standards for effective insurance protection.
The ACA guarantees uniform pricing with small exceptions, and this protects everyone from excessive charges.
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