How Will the New Health Care Bill Affect Health Insurance for Individuals?

Health insurance for individuals stands to see the most change since the passing of the health care reform bill, formally titled the Patient Protection and Affordable Care Act, though most of those changes won't take effect until the year 2014.

But there are a couple of reforms that will take place very soon, and might have an impact on an individual searching for health insurance. As of June 23rd 2010 there will be a newly created federal "risk pool" designed for those persons who have pre-existing conditions and were unable to find individual health insurance previously.

So, if you are a person who was unable to find affordable health insurance due to a pre-existing condition, it would be wise to research these federal risk pools and see if you qualify.

Also, if you are under the age of 26 and have a parent with good health insurance, you will be able to stay with a parent's coverage under the COBRA plan as of this year. This means that you might not need to go on the individual health insurance market right away, if you can maintain coverage through your parent.

In 2014 many changes in the health insurance market will arise that will impact the cost of health insurance for individuals. First of all, it will be illegal for health insurance companies to deny applicants for coverage based on pre-existing conditions, and these insurance companies will be unable to charge individuals more money based on that health status.

This means that individual health insurance will no longer be more expensive than other forms of medical coverage.

However there are some exceptions. Smokers will pay more than non-smokers on the health insurance market, due to the high likelihood that they will need expensive medical care in the future. And while older people might be charged more than younger people, it will be illegal to charge older people more than three times what a younger person would pay for the same plan.

In order to offset the cost of insuring those people who have medical conditions, it will become the law that all Americans must purchase some form of health insurance. Those who do not will be charged a fine of $695 dollars per year, or 2.5% of their income, whichever is higher. There will be an exemption, however, if premiums top 8% of your income, meaning poorer people will not be fined if they can't afford coverage.

For those people who still can't afford to purchase individual health insurance, each state will offer insurance "exchanges" that will offer individuals and small businesses a chance to purchase coverage that has been standardized at low rates, while still offering a minimum of coverage.

And in some cases individuals who live near the federal poverty level will receive vouchers enabling them to pay less for their coverage. The very poorest individuals will have their health insurance subsidized by the federal government, much as Medicaid does today.

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