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Mathematics & Economics
English (U.S.)
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Summary: Turmoil in the Health Insurance Market places (Essay Sample)


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Summary: Turmoil in the Health Insurance Market places
The article highlights the challenges that have faced the market for the Affordable Care Act (ACA) as there is uncertainty in the health insurance marketplace and also looks at the factors that have caused the turmoil. Higher premium increases are just one of the issues affecting the adoption and full implementation of ACA. Morrisey suggests six viable policy options to address the challenges facing the ACA insurance marketplaces.
ACA features
The way the ACA was structured even those with pre-existing conditions especially the elderly were not to pay higher premiums than healthier people, but those who did not require the health coverage the most then faced higher premiums than before. There were also limits to the premiums the older people paid, which overburdened the healthier and younger people who were forced to forgo the coverage. To address this, the policy makers imposed penalties and supported a limited annual open enrollment period is that people could be covered even before they required health insurance. Nonetheless, mandated coverage was not enough to encourage people to enroll in the ACA.
Uncertainty and selective contracting
The health insurers faced uncertainty because of the new rules because there was no prior experience on such a health care law. The trade-offs of subsidizing premiums and the numbers of people who required health insurance were matters that the insurers considered. If many healthy people opted out and those requiring the coverage oversubscribed this would make insurance coverage unsustainable. Since medical underwriting was prohibited and there were limitations base on age rating, the medical insurers had few options for cost containment resulting in narrow network plans. Selective contracting became popular in managed care with insurers contracting specific hospitals and physicians in a managed network of providers where prices were negotiated, while there are tradeoffs between patient volume and price
Unfolding of Events 2014

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