The Alaska Dispatch has an article out today about how health insurance premiums in the state “could skyrocket in 2014.”
Those purchasing policies in the individual market will be most impacted, when rates rise “on average, 30 percent to an astounding 88 percent,” but rates are also expected to rise for people in small and large group plans.
One contributor to the rise in premiums is the new restriction on age rating bands. “Currently, [in Alaska] those who are 64 pay about seven times as much for the same policy as a healthy 21-year-old. The new law will limit the difference by a factor of 3-to-1, not 7-to-1. As a result, rates generally will fall for the 64-year-old, while rising for the 21-year-old..”
The article also provides two examples of how subsidies could – or could not – affect premiums:
“Say you’re a couple in your early 50s with two teenage children. You earn less than four times the poverty rate, or $115,000 for a family of four. Your costs could fall 70 percent in part because you’ll be eligible for a new federal health-insurance subsidy, Davis said. But if that same couple makes too much and isn’t eligible for that subsidy, their current premium could double, costing them thousands of dollars extra a year.
“If you’re a couple in your early 30s with two young children, and you receive the subsidy, your family could see a 42 percent decrease compared to what you pay today. But make too much, and that same young family could see premiums rise an amazing 157 percent.”
For more information about factors driving premium increases, check out Time for Affordability.