How the Affordable Care Act will affect my health insurance

October 23rd, 2013

Today I received a few emails from Human Resources at the South Texas College of Law regarding increased health insurance premiums. I post these comments with permission.

First, our premiums are going up this year 18%.

 Aetna’s initial bid proposed a premium increase of 18%, which is an increase of $403,553 per year.

I asked if the ACA played any role in this increase. He replied:

The answer to your question is that 4% of our increase is a result of ACA.  More specifically, those are the fees, etc. Aetna has to pay to offer us the plan, so they pass those through at cost.  The dollar figure for that is approximately 90k. An even more interesting part to this, at least to me, is that if we decide to self-insure, we will have to pay a fee to subsidize the insurance exchange.  The government will be using those fees for “premium stabilization” in the exchanges.
You may also be interested to know that if the “cadillac tax” stays in place as is, our plan will be subject to very high fees once that element is effective.
I inquired further about the impact of the “cadillac tax” on our very generous health package.
To be frank, we will have to adjust the plan before we get to that point. I have prepared an estimator to at least give an idea, based on what we know now, as to what the tax will be.  So, assuming an 8% annual premium increase, which is getting harder to maintain, our tax would be approximately $241,620 in 2018.
In other words, as a result of the ACA, we won’t be able to keep the plans we had. Did anyone actually believe this?
The Affordable Care Act has made “coverage” it’s main priority. But having insurance is only the start. Obtaining health care will remain expensive, and likely get more expensive to cover the costs of new people entering the system (and these are the people most likely to need it, but who could not afford it before).