Under new health care reform policy, it has been decided that in order to meet strict guidelines in reducing cost of coverage for older customers, the young will be forced to pay more.
The health industry requested that the Department of Health and Human Services adopt a phase in reform policy for the rate increase. The new law states a 3:1 ratio in determining health care rates where adults over age 50 cannot be charged more than 3 times the rates of younger individuals. The industry proposed a phase in plan where HHS starts out with a 5:1 ratio and then over time shrinks the gap to a 3:1 ratio arguing that the 3:1 ratio will cause health care premiums for younger individuals to skyrocket. According to Karen Ignagi, the president of America’s Health Insurance Plan, “The new restrictions on age rating will result in an overnight increase in health care costs for people in their 20s, 30s, and early 40s.”
The industry insurers worry that these rate increases will cause younger individuals to pay the penalty and forgo coverage since it will be less expensive than paying the increased rates.
HHS claims that they have no authority to permit a phase in reform due to the law inhibiting insurers to discriminate coverage rates based on gender, age, past insurance claims, occupation or the size of a small employer. Premium rates, however, can vary based on tobacco use, family size, and geography.
For more information on rate increases for younger individuals, click here.