PPACA Update:
Individual Health Insurance Rates Increasing Dramatically in 2017


For the past year or so we have been on the road presenting the details of the Patient Protection and Affordable Care Act (PPACA) to trade groups, financial advisors, attorneys/counselors, chambers of commerce, and CPA groups.  One important component of our presentations is what we describe as "The biggest impact of PPACA that nobody is talking about"...  the PPACA Reinsurance Program.  So, you may ask, what is the PPACA Reinsurance Program?

When the federal government approached the health insurance carriers with this lovely, 3000+ page piece of legislation, the carriers immediately recoiled.  One of the biggest concerns health insurance carriers had with the PPACA was the federal governments insistence that they accept everyone without asking any questions.  To put the consequences of this mandate into perspective - consider the following:
  • What would happen to your car insurance premiums if you could get insurance after you totaled your car?
  • What would happen to your homeowners insurance premiums if you could get insurance after your home burned to the ground?
  • What would happen to your life insurance premiums if you could get insurance after you are dead?
  • Keep in mind that with all of these examples, you would not pay any more for your insurance than someone who did not total their car, burn their house down, or die.
The answer...  Your premiums for these insurance products would skyrocket

Understanding the level of risk they would be taking on, the health insurance carriers informed the federal government that there was no way they could remain solvent if there was no "safety net" program in place.  This is how the Reinsurance Program was born...  the federal government imposed a fee to employers and insurers of roughly $3.67 per member/per month to stabilize premiums.

Here is how it works
  • In 2014 - if a person has medical claims exceeding $45K in one plan year, the Reinsurance Program will reimburse the insurance carrier 80% (up to $250K in total claims)
  • In 2015/2016 - if a person has medical claims exceeding $70K in one plan year, the Reinsurance Program will reimburse the insurance carrier 50% (up to $350 in total claims)
Simple concept right?  If a person has a really bad year, medically speaking, the program will help pay the claims so the insurance carriers don't have to wrap those losses into their premium increases for all of us the following year.  Here is the problem - the Reinsurance Program is going away in 2017.

As a result of the Reinsurance Program going away in 2017, the health insurance carriers have no "safety net" for excessive claims on the people they cover.  This has put the health insurance carriers in a position where they have no choice but to raise their premiums substantially in anticipation of what will likely be a record year in terms of losses in 2017

Please CLICK HERE to see the CNBC article on this topic

As always, we sincerely appreciate the opportunity to assist you with your health insurance needs!  You can contact the professionals at Altruis Benefit Consulting using the information below if you have any general concerns about your coverage, Open Enrollment, or Health Care Reform in general.  We look forward to hearing from you!

www.altruisbenefit.com | 877.442.5878 | @altruishealth | info@altruisbenefit.com


altruis benefit consulting

Empower yourself!  We have earned the trust of over 200 Michigan employers through our use of innovative technology and over 50 years of combined market experience.  Contact us today to see how our products and services continue to evolve with today's changing marketplace.



877.442.5878 | www.altruisbenefit.com | info@altruisbenefit.com