Age Rating Restrictions: Threatening Affordability for All Ages

Age Rating Restrictions: TIME FOR AFFORDABILITY. THREATENING AFFORDABILITY FOR ALL AGES There is broad agreement that for health care coverage to be affordable the young and healthy need to purchase coverage to help cover the costs of those who are older and sicker. The Affordable Care Act (ACA) strictly limits how much premiums can vary based on a person's age. This will result in significantly higher premiums for younger individuals and families, increasing the likelihood that younger, healthier people will choose to wait to purchase health insurance until after they get sick or injured, thus driving up costs for everyone - young and old. Current Coverage To help ensure coverage remains affordable, most states' allow premiums for an older person to be at least five times more than what a younger person Older patients typically incur significantly higher health care costs than younger people. would pay for the same policy. Starting in 2014 the ACA Limits How Much Premiums Can Vary Based on Age January 2014 Starting January 2014, the ACA limits the premium an older person can be charged to no more 12 13 14 I5 16 17 19 20 21 22 23 24 25 than three times what a younger person is paying for the same policy. 26 2 28 29 30 31 Impact of Age Rating Changes on Health Insurance Premiums PAYS 29% MORE PAYS 19% MORE г PAYS 4% MORE I PAYS 5% LESS PAYS 8% LESS 21-29 30-39 40-49 50-59 60-64 YEARS OLD YEARS OLD YEARS OLD YEARS OLD YEARS OLD If the young and healthy wait to buy coverage until they need it, older people could face cost increases that likely exceed the savings due to age rating changes. Without broad participation, costs will increase for everyone – young and old. 1 Currently 42 states have age rating bands that are 5:1 or more. 2 Adapted from Chart 1, Kurt Giesa and Chris Carlson. Age Band Compression Under Health Care Reform. Contingencies. January/February 2013. This shows the pure effect of age band compression on premiums by excluding the impact of the essential health benefits package, selection effects, and other factors assumed in CBO premium estimates relied on in the article to facilitate comparison to premium assistance. Design AHIP- All Rights Reserved: © AHIP 2013 AHIP Premiums