Side Effects: More Bad News for Those Who Like Their Current Coverage

Kathryn Nix / September 09, 2010

When House Speaker Nancy Pelosi (D-CA) said Americans would have to wait until Congress passed Obamacare to find out what was in it, she wasn’t kidding. Since the passage of the Patient Protection and Affordable Car Act nearly six months ago, Americans have been faced daily reality checks from the health care overhaul, and none of them have been good.

In fact, those Americans who own health insurance policies from smaller insurers are already feeling the pinch from Obamacare. Smaller health insurers may face additional obstacles to stay in business in light of the new law’s mandates, with some predicting Obamacare will drive them out of the insurance market altogether.  Not only does this mean that Americans who are currently happy with their insurance coverage will see changes they don’t like, but it signals even more choice restriction among health plans.

One of the contributing factors for this fallout is the new requirement that insurers meet federally determined medical loss ratios. The ratios require insurers to spend a certain percentage of income from premiums on medical expenditures, rather than administrative costs, taxes or profits. (more…)