More On Legal & Compliancefrom The Advisor's Professional Library
- The New and Improved Form ADV Whether an RIA is describing its investment strategy in advertisements or in the new Form ADV Part 2, it is important the firm articulates material risks faced by advisory clients and avoids language that might be construed as a guarantee.
- Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
As debate began in the Senate on healthcare reform following the Thanksgiving recess, the Congressional Budget Office released on November 30 its much-anticipated analysis of the impact on healthcare insurance premiums should the proposed Senate healthcare reform bill--the Patient Protection and Affordable Care Act, introduced by Senator Harry Reid (D-Nevada) on November 18, 2009 as a substitute for the House reform bill, H.R. 3590--become law.
While the extensive CBO analysis, performed in conjunction with Congress's Joint Committee on Taxation (JCT), warns that the "factors affecting premiums are complex and interrelated--and thus can be difficult to disentangle," and also notes that it "does not incorporate potential effects of the proposal on the level or growth rate of spending for health care that might stem from increased demand for services" that could be produced by expanding healthcare insurance, it concludes that the impact on premiums for employer-sponsored plans would be minimal at most, while those who are in private plans would see an increase of 10% to 13%, prior to any government subsidies that those individuals would receive.
CBO writes in its analysis that the "average premium per person covered (including dependents) for new nongroup policies would be about 10% to 13% higher in 2016 than the average premium" for those policies in 2016 under current law (it is in 2016 that the provisions of the bill would be fully implemented). CBO also notes that "about half of those enrollees would receive government subsidies that would reduce their costs well below the premiums that would be charged for such policies under current law." In dollar terms, CBO said "average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law." These nongroup policyholders would account for 17% of the entire health insurance market by 2016, CBO says.
The analysis also looked at the impacts of the bill on premiums for group coverage, both small and large, which would account for the lion's share--"about five-sixths"--of the total health insurance market. For the small group market, defined as employers with 50 or fewer workers, the analysis estimates that the "change in the average premium per person resulting from the legislation could range from an increase of 1% to a reduction of 2% in 2016 (relative to current law)." In the large group market--employers with more than 50 workers--CBO and JCT estimated that the bill "would yield an average premium per person that is zero to 3% lower in 2016 (relative to current law)."
To download the complete analysis, please click here.
To read CBO Director Douglas Elmendorf's blog on the analysis, please click here.