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New health care law relies on the individual mandate

New York State recently announced the premium rates for health plans that insurers will offer on the new Health Benefits Exchange this fall. This is good news for many New Yorkers who will have lower premiums in 2014.

The current direct pay market for individuals who purchase coverage on their own is approximately 17,000 people. These consumers will have lower premiums.

As with any complex law or policy, it’s not one size fits all, and not everyone will be affected the same way.

Currently a large number of individuals get coverage under the Healthy NY program. That program will no longer be available as of January 2014. Those members will have the option of enrolling in the new exchange plans that will have richer benefits. Depending on their current coverage, some Healthy NY members may see higher premiums in 2014 than they pay today. Many single business owners purchase group coverage through chambers of commerce. Starting in January, they will be purchasing in the individual market and may see higher premiums as a result.

It is important to get the exchange up and running. However, we still need to address the underlying costs of care and the numerous factors that continue to drive up those costs.

One of the key factors, and perhaps the biggest challenge to making this all work, is spreading the costs of care over the largest possible pool of people. The pool must include a balance of healthier people as well as those with higher health care needs, otherwise, premium rates rise dramatically. The requirement for individuals to have health insurance or pay a tax, the “individual mandate,” is critical to achieve this.

However one feels about Congress requiring people to have coverage, the law’s mandate recognizes this reality of how the insurance system works.

Don Ingalls, Vice President

State and Federal Relations

BlueCross BlueShield of WNY