Why do ACA compliant plans cost so much more?

Published 11/06/2014 08:34 AM   |    Updated 10/27/2015 02:17 PM
Why do ACA compliant plans cost so much more?

There are two primary reasons:

 

1) Guaranteed Availability: Before the ACA, insurance companies could decide not to sell someone health insurance if they had costly "pre-existing conditions." This made it easier for insurance companies to sell insurance at lower rates. After the ACA, companies have to sell insurance to anyone. This makes it easier for people with pre-existing conditions to buy health insurance, but also means that rates must increase so there is money to pay for these new and often expensive bills.

 

2) Richer Benefits: The ACA set a new standard for what is considered "basic coverage." Many new benefits, like maternity, were not traditionally included in individual health insurance. The ACA defined these benefits as "Essential Health Benefits" (or EHBs), which now must be covered in all plans.

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