For many individuals and some small business owners, the Supreme Court upholding the Patient Protection and Affordable Care Act means you will be looking into securing your health insurance through a health insurance exchange set up in your state.
If your state opts out of setting up its own exchange, you will be able to utilize a multistate exchange. Multi-state exchanges will be operated by the Department of Health and Human Services.
What is a Health Insurance Exchange? A HIX (Health Insurance Exchange) is a state based competitive market for consumers to purchase private health insurance from companies licensed by the state. The Exchange will regulate the insures to make sure coverage complies with the laws mandated by the Affordable Care Act, and offers affordable rates for individuals as well as qualified small businesses. The state requires that plans are easy to read and compare, ensuring purchasers can choose based on their needs.
Individuals whose insurance would cost less than 8% of their income are mandated to buy their own healthcare and are eligible to join a HIX. HIX aggregates small businesses along with the eligible individuals. The sheer numbers of participants allows for insures to offer plans with premiums that before could only be provided to large-scale purchasers like large businesses. If you are an employer with fewer than 100 employees, you will be allowed to participate in a HIX starting in 2014. This means your premiums and choices of plans are comparable to plans offered to multimillion-dollar national companies. Depending upon the size of your small company, you may be eligible for a tax credit. For instance, a small business with 25 or fewer employees earning under on average of 50 thousand dollars or less will get a tax credit for up to 35% of the cost of your insurance plan.
You may be asking, “How is this going to affect my cost?” “Will I still be able to get cheap health insurance?” The answer is yes and no. Estimates from the Congressional Budget Office (CBO) show the cost of healthcare rising approximately 5.7% a year for the next 10 years. Nevertheless, the CBO says that prediction is lower than if the Affordable Care Act did not pass. It breaks down this way. Individual premiums will rise a little bit, large companies will see a minimal drop in their premiums, and small business will remain at the same relative rate of change.
Let’s look into a case of individual injustice. In June 2010, Kaitlynn Fisher went through stop lights on green. Halfway across the junction, an SUV came through the red light and smashed into her car. She was killed. The driver of the SUV was underinsured. Kaitlynn was insured by Progressive and one of the terms was a duty to pay up to $100,000 if an uninsured or underinsured driver caused injury or death. Except the law of Maryland is a nightmare. The insurance company is not obliged to pay out if its insured was in any way to blame for the accident. Hence, if a court was to find one driver 99% to blame, the 1% fault attached to the other driver would defeat her claim. This is an amazing law. To make it worse, there’s no right to sue the insurance company directly. The relatives of the deceased has to sue the other driver and get a ruling the deceased was not even 1% to blame for the accident. So that’s just what they did.
What makes this story remarkable is that Progressive sent a lawyer to the trial who addressed the judge and jury, and sat beside the defendant, offering advice. According to Progressive, this lawyer was protecting its interests and not representing the defendant. The fact the lawyer was protecting Progressive’s interests by arguing Progressive’s policyholder was to blame is irrelevant.
Not surprisingly given the adverse publicity, Progressive has now reached a settlement with the family of the deceased. However, consider the potential effects of this publicity. Progressive was able to provide cheap auto insurance as it used every possible trick in the book to avoid paying out. If it now feels the glare of the public’s attention, it may well change that business model. This would mean more generous settlements to avoid going to court and, if court action cannot be avoided, always arguing in favor of its policyholders. This means paying out a lot more money to all those insured and represents the end of cheap auto insurance rates . A mildly ironic outcome for those fighting an injustice.
In some states, the level of car insurance fraud is reaching epidemic proportions and this is forcing up the auto insurance quotes for all. Nationally, it’s estimated several billion dollars is being stolen from insurance companies by staged accidents supported by paid witnesses, and corrupt attorneys and medical advisors. No matter how much taxpayers money is diverted from budgets in deficit to law enforcement, it all comes down to the insurance companies to report every suspected case of fraud to the police for investigation, and for all innocent drivers to take a few simple steps whenever they are caught in an accident.
We need to begin with a general word of reassurance. The vast majority of collisions are genuine accidents but some criminal gangs are now using staged crashes as a way of extracting money from the insurance industry. In the safe version, vehicles driven by gang members will collide with each other at a high visibility location where there are many independent witnesses. But some involve innocent motorists who are put in situations where rear-end collisions are likely to occur, e.g. a spotter in a gang vehicle watches for the driver behind to look away from the road and tells his driver to make a panic stop.
There’s an assumption you’re the driver at fault if you hit the vehicle in front of you. Don’t tailgate. Always drive sufficiently far behind the vehicle in front you can always stop in an emergency. More importantly, if you’re caught in an accident, call the local law enforcement to the scene and immediately begin documenting the damage to the vehicles and who is in the other vehicle. If anyone tries to direct you to an attorney or doctor, this is suspicious. Should a tow truck appear on the scene without anyone apparently calling it for you, do not allow it to take your vehicle. If an attorney or doctor suggests you make a claim even though you are not injured, this is a crime and should be reported to the police. Indeed notifying the police and your own insurers is the sure way to expose fraud and keep everyone’s auto insurance quotes low.