In the News: Health Insurance Tax, Age Rating Restrictions Will Cause Premiums to Rise

Two articles out today highlight how provisions in the health reform law will impact premiums.

Politico looks at how the $100 billion health insurance tax is already causing premium increases.

AHIP spokesperson Robert Zirkelbach was quoted in the article, saying “‘There’s a massive new health insurance tax that starts in 2014,’ said Robert Zirkelbach, a spokesman for industry groupAmerica’s Health Insurance Plans. ‘For policies that are sold in 2013 and extend into next year, there’s going to be taxes imposed. … As a result, like all taxes, they will be reflected in premiums charged.’”

The article also mentioned a study of the tax conducted for AHIP, noting “The health insurance tax is going to have the greatest impact. It is expected to increase premiums by about 1.9 to 2.3 percent in 2014, according to a study by Oliver Wyman that has been touted by the insurance industry.”

Learn more about how the tax will impact you at End the Health Insurance Tax.

A blog post on Reason examines how age rating restrictions will cause premiums to increase for younger individuals, saying,

“Now a study from the consulting firm Oliver Wyman projects that the law’s insurance restrictions will raise health insurance prices for young people. The study estimates that people in their 20s could see hikes in the range of 42 percent. Those in their 30s could see premium hikes of about 31 percent. That’s because the law restricts how much insurers can restrict premiums based on an individual’s age; insurers can charge older individuals no more than three times what they charge the young. Which means that younger individuals will have to balance out the greater costs of older beneficiaries; it essentially forces the young to subsidize health insurance coverage for the old.”

The blog post also cites AHIP’s comment letter to HHS recommending age rating restrictions be phased in out of concern that when younger people are faced with high premiums, they will drop coverage altogether.

AHIP has been raising awareness of the provisions affecting premiums through Time for Affordability.

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