Because government-imposed laws and regulations can significantly impact the insurance industry, American politics and insurance are intertwined.
Because insurance is a regulated industry, the government has a big say in what regulations and laws insurance companies must follow.
One of the most important connections between American politics and insurance is the Affordable Care Act (ACA), sometimes known as Obamacare. The ACA was passed in 2010 to increase Americans’ access to health insurance. The law required that the majority of people have health insurance and created insurance marketplaces where people may purchase insurance coverage. The Affordable Care Act also had other provisions, such as premium tax credits and cost-sharing reductions, that were intended to cut the price of insurance.
The Affordable Care Act (ACA) has split American politicians, with Republicans and conservative groups opposing the law and calling for its repeal. A measure passed in 2017 by the Republican-controlled Congress abolished the individual mandate, requiring most Americans to get health insurance. The ACA’s future is still up in the air as a result of numerous legal problems that have arisen since then.
Another way that the government regulates the insurance industry is through the state-based system of insurance commissioners. An insurance commissioner is appointed by each state and is in responsible of upholding insurance regulations and laws, approving insurance-related products, and granting licenses to insurance companies. The insurance commissioner acts as a consumer advocate and strives to ensure that insurance companies treat customers fairly.
Another example of how American politics and insurance are interwoven is the National Flood Insurance Program (NFIP). The NFIP, a government program, offers flood insurance to homeowners who live in flood-prone areas. The Federal Emergency Management Agency’s (FEMA) program is many homeowners’ only flood insurance choice. The NFIP has come under fire for being financially unviable and for not providing significant protection for homeowners. As a result, a number of improvements to the program have been made.
Another way that the government regulates the insurance industry is through the state-based system of insurance commissioners. An insurance commissioner is appointed by each state and is in responsible of upholding insurance regulations and laws, approving insurance-related products, and granting licenses to insurance companies. The insurance commissioner acts as a consumer advocate and strives to ensure that insurance companies treat customers fairly.
The American tax laws and regulations have an effect on the insurance industry as well. For instance, the Tax Cuts and Jobs Act of 2017 was passed by the Republican-controlled Congress and included a provision that eliminated the individual mandate and reduced the tax penalty for failing to purchase health insurance. As a result of this action, fewer people have insurance, while the number of uninsured people has increased.
In conclusion, there is a close relationship between insurance and American politics. The insurance industry may be significantly impacted by laws and policies enacted by the government. The National Flood Insurance Program and the state-based insurance commissioner system (NFIP) are two more ways that the government supervises the insurance industry. Government tax laws and regulations impact the insurance industry. Policyholders should monitor the potential impact of political changes on policyholders’ insurance coverage.
