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Unintended consequence of ACA might lead spouses to lose coverage

Mar 01, 2013

These days, many Americans are paying attention to the ways in which the Affordable Care Act might lead them to look into new ways to find health insurance coverage, but it seems that one unintended consequence of the new law is that some employers might opt to no longer extend plans to workers' spouses.

It's very likely that health insurance prices for millions of Americans and companies will rise as a result of the mandate that all people across the country are covered under the Affordable Care Act, as insurers will necessarily have to increase premiums to cover the costs added by the requirement that they cannot deny applicants for their preexisting conditions, according to a report from Investors Business Daily. As such, this change will likely impact millions of Americans who receive coverage through a spouse's employer-issued health insurance.

The reason for this is that in general, health insurance costs will rise significantly for a number of companies, and while recent data shows that many may not have plans in place for dealing with these added costs, the most logical solution many will have to find includes reducing the burden of those added costs in a number of ways, the report said. One of those ways might include no longer allowing workers' spouses to receive coverage on their plans as they might have in the past. This is likely exacerbated by the ACA's rule that children up to the age of 26 years old be covered by a parent's plan. Such a change will obviously allow companies to save significant amounts of money on their bottom lines, but may also financially endanger those workers.

In fact, it seems that many employers will actually have an incentive to no longer cover spouses, the report said. The ACA requires that companies pay a fee "per life" for every person they cover under their plans. Currently, that cost to the company is $1 or $2 per person, but will rise to $65 in 2014. As such, those companies which do not start excluding spouses in the remaining months of 2013 will likely start doing so when state health insurance exchanges go live next year.

What this means for Americans
Of course, the prospect of having a spouse lose coverage as a result of an employer changing their healthcare coverage policies is likely to be tough for many workers to swallow, and because of the mandate that everyone be covered in some way, that will likely force many workers to start seeking policies on their state's health insurance exchange, the report said. But again, these are likely to be at least somewhat expensive, given that policy prices will likely rise across the board once the ACA's mandates go into effect, and that could strain the bottom lines for many families across the country, particularly if the spouse for whom they are now forced to seek coverage doesn't have a job of their own.

Further, it's also generally believed that those who try to cut corners with regard to cost when trying to find affordable care for their spouses within those state-run marketplaces, even if it's out of necessity, will likely see the quality of their coverage diminish as a result, the report said. Lower-cost policies acquired through exchanges are far less likely to have the same kinds of terms to which they may have become accustomed under their spouse's employer-issued plans.

Hospital executives will need to prepare for all sorts of eventualities brought on by the new healthcare laws, and as such might want to partner with receivables management companies that will help them and their patients to avoid medical bad debt, through comprehensive payment plans.

News brought to you by MDS, Healthcare Receivables Management Specialists.