The 219-212 House vote in favor of the Patient Protection and Affordable Care Act Bill (H.R.3590) is replete with implications for the insurance industry.

The Senate is set to take up the bill on Tuesday, and President Obama's signature is expected soon after. While opponents of the legislation are readying legal challenges, and Sen. Jim DeMint (R.-S.C.) has introduced a bill to repeal the legislation, the insurance industry is girding for a new reality.

Many of the most profound changes are the most immediate. This year, prohibitions against unwarranted rescissions and denials or exclusions for preexisting conditions will go into effect. Also, the law will stipulate that young adults will be able to stay on their parents' health plans until the age of 26, and uninsured adults with pre-existing conditions will be able to obtain health coverage through a new program that will expire once the proposed insurance exchanges begin operating. The plan includes a 0.9% Medicare surtax that would be imposed on some individuals, as well as small businesses, that file as individuals; and it includes a new, 3.9% tax on non-wage income, such as annuities.

Insurance industry reaction to the bill’s passage was swift and varied, however much of objection to the legislation centered on its perceived lack of cost containment measures. 

“Throughout this debate one of the areas of criticism has been that there’s a real lack of focus on reducing health car costs,” Kim Holland, Oklahoma Insurance Commissioner and Secretary-Treasurer for the National Association of Insurance Commissioners told Insurance Networking News at a press briefing today. “There a general agreement that many of these reforms will actually increase premium cost. The subsidies associated with them may reduce their out-of-pocket but that doesn’t mean insurance costs are going to be any less.”

Charles Symington, SVP of government affairs for the Independent Insurance Agents & Brokers of America, struck a similar chord.

“It is critical to note that the health care bill that passed today fails to bend the cost curve for health insurance consumers, including millions of small businesspeople,” Symington said in a statement “Health care reform must first and foremost address the rising costs of health insurance and this bill does nothing in this regard. As the Congressional Budget Office (CBO) acknowledges: under this bill, small businesses will see little to no decrease in their monthly premiums and individuals will see an increase of 10-13%.”

Karen Ignagni, America’s Health Insurance Plans' (AHIP) president and CEO, complained that absent a stronger individual mandate, the legislation would encourage people to wait until they are sick before getting insurance.

“The access expansions are a significant step forward, but this legislation will exacerbate the health care costs crisis facing many working families and small businesses,” Ignagni said in a statement.

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