Obamacare’s Impact on Life Insurance in 2016
The Patient Protection and Affordable Care Act (PPACA), better known as Obamacare was passed into law on March 23, 2010. Although the law was passed three years ago, there is still a good deal of confusion about what the law and what it covers.
The Purpose of Obamacare
The purpose of the law is to cover more Americans with affordable health care. No one will be excluded, even people with pre-existing conditions. The controversial aspect of the law is that it makes it mandatory that every American has to have health insurance.
Another big change is the fact that insurance companies can no longer refuse to insure people like they used to, and also they cannot drop people if they become ill. In addition, insurance companies can no longer charge higher premiums due to pre-existing conditions. Also the law limits the profits health insurance companies can make.
When Will We See Real Changes?
Even though Obamacare was passed into law over 3 years ago, the real impact won’t be seen until January 1, 2014. This is when the mandate that every American must have minimum essential health insurance goes into effect. If you don’t have coverage by then, you’ll have to pay a penalty.
What Affect Does Obamacare Have on Life Insurance?
The real impact will be felt by the millions of Americans that will be dropped from their group coverage plans through their employer. Under the structure of the new law, businesses with 50 or more full-time employees, (under the Affordable Care Act- 30 or more hours a week is considered full-time) will be required to offer health insurance or face stiff penalties. A much more profitable alternative under the new law allows employers eliminate their benefit packages altogether and make the employees buy their own health insurance through state health “exchanges.”
While Obamacare will not have a direct impact on life insurance as it does health insurance, the effects will still be felt by millions of people. Too many Americans will find themselves without the life insurance they once relied on through their employer. Unfortunately for some, new health problems will develop and aging will cause too many people to become uninsurable or left without affordable life insurance coverage. Now is the best time to lock in your life insurance policy.
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