Do Affordable Care Health Plans Cost Too Much?

Source: Aaron Pervin, Scholars Strategy Network, SSN Basic Facts, March 2014

… Is it true that insurance plans offered through Affordable Care exchanges cost too much? For most Americans who shop on the exchanges, federal tax credits make good health insurance very affordable – often for the first time in their lives. For a minority, sticker prices may seem high. But for them along with all others, health plans are more generous and much more dependable. It is important to explain why minimum prices for private insurance are sometimes higher. The Affordable Care law sets new rules for insurance companies. It requires companies to cover a minimum of essential benefits and prevents them from denying coverage to people with pre-exiting health problems. The law also requires what is called “modified community rating,” meaning that insurance companies cannot charge extra for women and can only charge modestly more to insure older people. In many states, these rules lead to slightly higher prices for certain plans offered on the exchanges – while also ensuring that everyone gets good coverage that cannot be taken away when expensive accidents or illnesses strike. …