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Thursday, March 21, 2013

Report rebuts claim that ACA is unfair to young adults

A Robert Wood Johnson Foundation/Urban Institute analysis says health system reform's coverage provisions will help mitigate the effect of setting new age rating bands.

By Jennifer Lubell
amednews.com
Originally published March 18, 2013

An Affordable Care Act provision that seeks to limit the amount by which insurance premiums can vary based on enrollees' ages won't result in young adults paying unreasonably high premiums, an analysis has concluded.

The impact of the ACA's new formula for setting age rating bands has attracted recent interest in Washington. Starting in 2014 under the law, insurers will be prohibited from selling nongroup coverage to an adult 64 or older for more than three times the premium they would assign to a 21-year-old for the same coverage. This translates into a maximum 3-to-1 premium ratio based on age, which narrows the gap between what younger and older people pay for insurance now.
 
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A Robert Wood Johnson Foundation report prepared by the Urban Institute acknowledges that tighter ratios will lead to increased premiums for younger adults and lower premiums for older adults. However, the study projects that other ACA coverage provisions will mitigate the negative effects that young people may experience from the new age rating bands.