The Affordable Care Act (ACA)
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The Affordable Care Act (ACA) a.k.a. ObamaCare, May Not Be Affordable For Many (and this may impact first-time homebuyers)
The Ohio Department of Insurance commissioned a study from Milliman, Inc., a global actuarial firm, to ascertain the impact of ObamaCare on Ohio and its residents. Click here to read the entire Ohio document. Note: Stewart, as does most of the title industry, uses Milliman as an outside expert reviewing the actuarial soundness of reserves.
Milliman’s findings on the impact of the ACA on Ohio are sobering. (see Figure 4-6 on page 36 of the report) — direct quotes –
- Individual health care rates are projected to increase 55 to 85 percent
- Small group health care rates are projected to increase 5 to 15 percent
- Large group rates are projected to increase 0 to 5 percent
Everyone, however, will not be equally impacted. The report notes the following: — direct quotes –
- In the individual market, a healthy young male (with benefit coverage at the market average actuarial value pre and post-ACA) may experience a rate increase of between 90% and 130%. However, a 60 year old with chronic health conditions may experience a significant premium decrease.
- In the ESI-small group market, rating changes may result in a premium increase of 150% or a premium decrease of nearly 40% for groups at opposite ends of the current rating structure.
Even if there is adequate funding, the implementation of the Act will place an increased drag on the economy as most individuals will have greater expenses and less discretionary spending. And that will not be good for the economy. And if the burden as noted above is placed on the healthy young, then that in turn will impact first-time homebuyer sales and ultimately homeownership rates in a negative manner. Assuming these finding hold across the country, then the net result will be more renters and even a greater trend towards rising residential rental rates.