An article in the Idaho Statesman finds that some “…Idahoans could pay much more for health insurance next year, in part because of new federal rules that affect how much insurers can charge people based on age for coverage they buy on their own for themselves and their families.”
The rise in costs is due to a provision in the health reform law that limits the age rating band to 3:1. Currently, 42 states have a 5:1 or higher age rating band.
The article notes that “the idea is to spread the costs among everyone in the health insurance pool more evenly. But in states like Idaho, it could backfire, insurers say. They worry that young, healthy people will take one look at higher premiums and flee the market altogether – deciding it’s cheaper to pay the “individual mandate” fine, which starts at $95 a year in 2014 and plateaus at $695 starting in 2016.”
“That, in turn, would make the insurance pool on the whole sicker and older – meaning higher premiums for everyone.”
The article cites a recent study by Oliver Wyman which found that the health reform law will significantly increase premiums for younger individuals. According to the study, “people 21 to 29 who buy their own insurance and earn too much for low-income premium subsidies will pay about 40 percent more for health insurance, according to Giesa and Carlson. Those in their 30s will average a 31 percent increase.”