Will Obamacare eliminate private insurance?
asked Feb 17 '12 at 19:28
No, absolutely not.
The health care reform bill is not out to get private insurance companies and have them close down, as some naysayers feel. Rather, the new bill just aims to widen the choice of individuals when it comes to health insurance.
The great thing about the so-called Obamacare is that the bill will actually increase the number of people who will be buying insurance.
When the bill is fully implemented, it will require individuals, as well as employers, to be insured. Individuals who are not covered will be charged with gradually increasing fines until it will actually be cheaper to just get coverage than to pay the fine.
The same goes for employers who have more than 50 full-time employees. They will be charged with stiff fines depending on the number of people who ask the government for tax breaks in order to afford insurance.
So the bill will work to widen the playing field so that there are more customers who will buy from them. This ensures that private insurance companies have a wide market in which to compete. The one result of the health care reform bill is that with more people being covered, private health insurance companies don't have to worry about pre-existing conditions since there will be less people who will buy health insurance after they get sick.
But it will become necessary for private insurance companies to be highly competitive. For one, the bill will establish health insurance exchanges that will provide additional competition for private health insurance. To make matters better for private insurance companies, health insurance companies may also contract with private health insurance providers to be the ones who will provide the plans being sold in the health insurance exchanges.
Admittedly, it will be a challenge for private insurance companies to be competitive, but with the right strategy, it can be done.
This answer is marked "community wiki".
answered Feb 17 '12 at 19:28