A recent survey of insurers estimates that pemiums will almost triple for a 27 year-old man in 2014 as a result of the federal health reform law. Those in the health insurance industry would like to see those restrictions loosened making insurance more affordable for younger adults.
The facts: it costs six times as much to insure a 64 year-old than an 18 year-old. Simply tripling the insurance cost for an 18 year-old to help subsidize older individuals will be unaffordable and thus they will elect to be uninsured (not helping subsidize for the older age pool).
The Patient Protection and Affordable Care Act (PPACA) regulates the health insurance market in three ways:
- All Americans must secure health coverage.
- Because everyone must carry coverage, the law requires insurers to sell policies to whomever wants to buy them. There is also "guaranteed issue" meaning insurance carriers cannot deny coverage because of health status or history.
- In an attempt to control the cost of coverage, there is "community rating": the law prevents insurers from charging older individuals more than three times what they charge younger individuals.
Providing a perspective from health insurance underwriters, Janet Trautwein, CEO of the National Association of Health Underwriters, has outlined the affects of health care reform: How to Help with Healthcare "Sticker Shock".
For questions on how PPACA affects the State of Wisconsin, please contact knowledgebroker & WAHU President Pete Frittitta.
