Aetna CEO Warns of Approaching Health Insurance ‘Premium Rate Shock’ in 2014 for Consumers and Others Under Affordable Care Act
Excerpt: Will Premiums Rise Significantly for Younger Adults?Currently, the underwriting standard is that older consumers are charged about five times more than young adults. Even though these rate bands were narrowed under the ACA, insurers still expect older Americans to have a greater need for health care than younger Americans do. Thus, premiums for younger Americans may rise dramatically, Laszewski explained.
Laszewski predicts that individuals can expect a 30% to 40% increase in what they pay for health insurance. That cost includes premiums, deductibles, and copayments. He based this estimate on an informal survey of health insurers he conducted late last year.
“For example, expect individual health insurance rates for people in their 20s and early 30s to about double,” he reported. “People in their late 50s and 60s might see net decreases because of the benefit they will get from the rate band compression [mandated by the ACA Act].”
Also, premiums for small groups might rise by 10% to 20%, Laszewski said. “But small groups with lots of young people will be hit disproportionately since each person in the group has to be rated on an individual basis and then all of those covered rolled up into an average rate. Older groups might see rate decreases.”
To offset the cost of health insurance for individuals, the ACA includes government subsidies for consumers who have incomes of less than 400% of the federal poverty level. Those who make $46,000 as individuals or $92,000 for a family of four in 2014 will pay the full cost of insurance next year, Laszewski said.
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