Health care reform could cause premiums to go up

FORT WAYNE, Ind. (WANE) - After the Supreme Court upheld President Obama's health care overhaul legislation, NewsChannel 15 talked to experts in northeast Indiana to find out how the average person may be affected.

Greg MacDonald, the owner of MacDonald Insurance and Financial Services, said insurance premiums will likely go up.

"Not only because people who had pre-existing conditions and couldn't get insurance are now going to be insured," MacDonald said. "The bill has a minimum level of coverage clause in it, so those whose coverage doesn't meet the minimum level will have to either lower their deductible, which will increase premiums, or pay a penalty for that as well." 

Tom Markle, an attorney who deals with employer health care issues, said several aspects of the reform bill are already in place.

"If the decision would have been to throw out the whole thing, it would have wrecked havoc with employers who have spent millions on plan designs to adjust coverage," he said.

But some of the smaller businesses really hit with heath care costs had been putting off the decision about offering that benefit until the Supreme Court made its ruling on the law.

"The immediate result to employers is now the decision is put back on the front burner," Markle said.

He expects to see some small businesses dropping insurance plans for their employees in 2014 and opt to pay the penalties instead.

"The cost of that could very well be lower than the cost to insure them," MacDonald agreed.

Starting in 2014, employers with 50 or more full-time employees that don't provide insurance would have to pay a penalty of $2,000/full-time employee (minus the first 30 employees) each year.

These are the penalties if a person chooses not to get health insurance:

2014: The higher of $95* or 1 percent of taxable income
2015: The higher of $325* or 2 percent of taxable income
2016: The higher of $695* or 2.5 percent of taxable income
2017+: The same as 2016 adjusted annually for cost of living
(* per individual, up to three household members. Example: In 2014, a household of three would have a penalty of $95 x 3= $285. A household of eight in 2014 would have the same penalty.)

MacDonald and Markle both said the final effects of the health care overhaul can't fully be predicted because a major factor, what the federal health plan will look like, hasn't been decided yet.

"Insurance is confusing. [People should] get with their agent and ask questions. A good agent will explain what they need to know and will guide them through this process," MacDonald said.