Incentive One
Sec. 2701. of the Affordable Care Act determines fair health insurance premiums. While earlier premiums varied greatly depending on the person’s health, number of hospitalizations, involment in domestic violence and other factors, the Act significantly diminished the premium insurance companies could set. Thus, the Act states that the premium may depend only on geography where a person lives, family structure, age, tobacco usage and actuarial value of the benefit. Furthermore, age and tobacco premium provisions are limited by a ration of 3 to 1 for older people and 1.5 to 1 for smokers (Affordable Care Act). Thus, the Act enables insurance companies not to discriminate enrolees by actual health status which earlier resulted in the situation where the most disadvantaged groups in terms of health status had to pay the highest premiums for health insurance.
Incentive Two
Sec. 2718. of the Affordable Care Act aims to reduce the cost of health care coverage. The Act enables insurance companies to report publicly what percentage of premium is spent on actual clinical services and ensuring the quality of treatment and how much of premium money goes to administrative costs (Affordable Care Act). The measure strips insurers of the possibility to channel money for their own needs rather than ensuring proper treatment. Moreover, in cases when enrolee do not use health coverage at a given period, insurers, according to the Act, should refund the money by which premium revenue spent by insurers is above 20 percent for families and 25 percent for individuals (Affordable Care Act). The measure allows to make insurers’ spending transparent, significantly limiting the possibilities for cheating and ensuring that everyone has access to quality treatment.
References
Affordable Care Act. Web.