Car companies are taking the latest version of the Affordable Care Act seriously, and one of the main elements of the law is a new “car care” feature.
The law will also require that all car owners buy a car insurance policy covering the first five years of ownership, or about $5,000, for all new cars sold in the US, as well as for any vehicles they buy through dealerships.
That will cost about $1,500 per vehicle, and carmakers will have to provide information on the insurance policies to owners.
In a letter to consumers on Thursday, the Department of Health and Human Services (HHS) also outlined a new plan for states to offer insurance to those who need it.
It includes incentives to help people who qualify, a set of rules to reduce rates and rules to help insurers reduce costs.
“In addition to helping to pay for this important expansion of insurance coverage, this new insurance expansion will be part of a comprehensive plan to ensure the Affordable Healthcare Act’s coverage expansion is delivered as efficiently and effectively as possible,” said Sarah Emslie, acting deputy director for the Centers for Medicare and Medicaid Services (CMS), in the letter.
“This is why the new health insurance plan is so important.”
The law has raised concerns that insurers could sell higher premiums to people who need more coverage.
In some states, like California, insurers have said they will continue to offer coverage for those who qualify for the tax credit, or the cost-sharing reduction payments that go to those without insurance.
The ACA is expected to be signed into law on Friday, but some consumer advocates and auto makers have warned that some states may not have the resources to provide coverage for everyone, or at least for everyone who doesn’t qualify for a tax credit.
The legislation will be a boon to car companies in some areas.
“The fact that states will be able to offer car insurance to the people who don’t qualify is a big deal,” said Steve Blanchard, executive director of the Consumer Federation of America, which represents more than 80 million consumers in the United States.
Some states have also announced that they are considering a plan to offer subsidies to people without health insurance who buy a new car through dealers or online.
“The state of New York is a good example,” said Mark Schauer, an associate professor at the University of Michigan Law School who specializes in insurance law.
“We’ve got a lot of states that are moving towards universal health coverage and that means more people getting insurance, which will make it easier to enroll people in the marketplace,” Schauer said.
Carmakers have long pushed for a universal coverage expansion, which is why they have been lobbying for the extension of the COVID-19 tax credit for the first few years of insurance.
The tax credit is expected by the end of next year, but it was extended only in 2018.
The cost-savings and the expanded insurance are likely to result in an increase in car ownership in the coming years, which could lead to higher profits for car companies, said Schauer.
Read more about car insurance: Read the whole story at the Washington Post.
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