Lawmakers Argue Over ACA’s Effect on Young Adults’ Health Premiums
Republican and Democratic members of the House Energy and Commerce Subcommittee on Health on Friday debated whether certain provisions in the Affordable Care Act would significantly increase health insurance premiums, particularly for young adults in the individual and small-group markets, The Hill's "Healthwatch" reports (Viebeck, "Healthwatch," The Hill, 3/15).
Under the ACA, health insurers must limit premium costs for older adults to no more than three times the cost of premiums for younger people. According to America's Health Insurance Plans, most states currently use at least a five-to-one age rating band on premiums (Attias/Ethridge, CQ Roll Call, 3/15).
Though insurers have said that premiums will increase under the requirement, Politico reports that their estimates are still just projections and that neither the Democrats nor Republicans have "concrete evidence" to support their conclusions (Winfield Cunningham, Politico, 3/18).
Recent Reports on Effect of Age-Rating Provision
A report released earlier this month by the Urban Institute found that concerns about the age-rating provision causing young adults' premiums to significantly increase are overstated.
Analysts Linda Blumberg and Matthew Buettgens found that the vast majority of the 10 million young adults ages 21 to 27 who currently lack insurance and the three million who already have coverage will either qualify for Medicaid, the Children's Health Insurance Program, their parents' health insurance plans or subsidies offered through the insurance marketplaces. As a result, while premiums will rise, out-of-pocket costs will remain unchanged, the analysts said (Reichard, CQ HealthBeat, 3/6).
However, officials from several large health insurers have warned that U.S. residents who purchase health coverage in the individual insurance market could see their premiums increase by between 20% and 100% in January 2014 (California Healthline, 3/14).
Provision Will Result in Rate Shock, Republicans Say
Republicans on the subcommittee argued that the ACA's provisions will result in rate shock for young adults.
They called on two witnesses -- Christopher Carlson, from the management consulting firm Oliver Wyman and former Congressional Budget Office Director and American Action Forum President Douglas Holtz-Eakin -- to support their projections (Politico, 3/18).
Carlson said that his firm found that premiums would increase by between 29% and 42% for young adults ages 21 to 29 who are ineligible for subsidies and by between 19% and 31% for adults ages 30 to 39 who are ineligible for subsidies. However, he acknowledged that "most people will see a decrease in the amount of premiums they pay, primarily due to the premium subsidies offered through the ACA" (CQ Roll Call, 5/13).
Holtz-Eakin said the premium increases would be "dramatic" in the individual market, increasing by as much as 149% in the small-group market and by as much as 189% in the individual market (Politico, 3/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.