Young Americans Will Not Bear Cost Burden Of Covering Older Americans Under Health Reform
Reason Given By Insurers for Expected Higher Premiums Is Not Founded
SUNNYVALE, Calif., April 11, 2013 /PRNewswire-USNewswire/ -- A new health insurance pricing report from HealthPocket, Inc. shows that current premiums are already largely in line with the Affordable Care Act's (ACA) age-based restriction on pricing, and insurer claims of related price increases for young people due to the restriction are unfounded. At the same time, gender-based pricing equality required by the health reform law will have a significant effect on pricing in most states.
Currently in most states, a health insurance premium is based on age as well as other factors such as gender, health, and smoking status. However, starting in 2014, the ACA will limit how much a health plan can charge in regards to age, with the oldest not paying more than three times the premium amount of the youngest that live in the same region and share the same status as smokers or non-smokers.
The study shows that average premiums across the nation increase 260 percent for 63-year-olds versus 23-year-olds under current plans, well under the 300 percent cap allowed under the ACA. Fourteen states currently exceed the ACA cap with the four highest above 350 percent of the limit including Alaska, Delaware, Oregon, and Wyoming.
"The biggest unknown right now for healthcare consumers is how health reform will affect what they pay for health coverage starting in 2014," said Bruce Telkamp, CEO of HealthPocket. "It is encouraging to know that age rating requirements in the health law will not be a major driver of increases to premiums."
The HealthPocket report also found the average premium for a 23-year-old man was nearly 20 percent less expensive than the average premium for a 23-year-old woman. The ACA will eliminate gender distinctions so a same age male and female nonsmoker in the same city will pay the same rate.
"Unlike the age rating limit, the elimination of gender-based pricing will drive premium changes. Certain segments such as younger women will benefit from the prohibition while younger men may pay more as a result," said Telkamp.
The results of the study were based on an analysis of over 20,000 premium quotes for 3,629 health insurance plans available within the two largest metropolitan regions in each state. The report examined price increases in existing policies for males and females ages 23, 30, and 63. Health plans were limited to the individual and family insurance market for consumers under the age of 65. This HealthPocket InfoStat is part of a series using health plan data to produce objective, meaningful, and clarifying information and guidance for consumers navigating an ever-changing health insurance marketplace.
To compare how health plans are currently priced, based on age, and gender in any geographic location, visit HealthPocket's Plan Comparison Tool.
HealthPocket.com is a free website that compares and ranks all health plans available to an individual, family, or small business, so everyone can make their best health plan decision and save on their out of pocket costs. The Company uses only objective data from government, non-profit, and private sources that carry no conditions that might restrict the site from serving as an unbiased resource. The founders of HealthPocket.com spent decades pioneering online access to health insurance information and knew they could offer something different that can positively change how people buy and use healthcare in the U.S. Learn more at www.HealthPocket.com.