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What the ACA Decision Really Means for Private Health Insurance Print E-mail
Written by Paul Gionfriddo   
Friday, 06 July 2012 07:56

Did the Supreme Court save private health insurance, or just drive another nail in its coffin?

Ironically, it might well turn out to be the latter.

Keep in mind that from a consumer perspective, much of the Affordable Care Act was about trying to keep private insurance affordable in America. But "affordable" is a relative term. When your employer pays most of the cost, insurance is a lot more affordable than if you're paying the bill yourself.

At over $20,000 per year for a typical plan providing family coverage, health insurance now costs around 40% of the median household income of $49,445!

Being mandated to take on that expense - even with the generous subsidies ACA provides - understandably rankles people. It's no wonder that millions of healthy people may still choose to roll the dice and go without.

But even though we have spent so much time arguing about the cost of insurance and the private insurance market, the fact is that it pays only a small part of the nation's health care bill.

An August 2011 article in the New England Journal of Medicine reported that private insurance paid only a little over a third of all health care costs, and even less - one quarter - of mental health care costs.

Even those small numbers are high. When you take into account (1) the share of private insurance that is subsidized by the government through tax benefits and (2) the share of private insurance that is paid by all levels of government on behalf of public employees, the percentage of care paid for by privately-funded private insurance is only in the teens.

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Last Updated on Friday, 13 July 2012 10:45

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