Friday, October 18, 2013

Insurance to Raise for the Young, According to Conservative Group

Young paying for the sick and elderly, says AAF

Young people may have bad news upon sign ups for the Affordable Health Care Plan if the site can ever actually be fixed to work properly.

A new report from a conservative actions forum stated that the health insurance rates for nearly 3 million individuals between the ages 18 to 35 will be drastically increased. To be fair, it is a conservative think tank group, and so the outcome is not exactly surprising.

According to the group and think tanks like it, the entire idea behind the individual mandate was to have such individuals pay higher totals in order to make up the costs that are accrued by older or sickly individuals.

“Due to the ACA’s sweeping market reforms, rates for low-premium plans have increased exponentially between 2013 and 2014. In fact, on average, a healthy 30 year old male nonsmoker will see his lowest cost insurance option increase 260%,” reads AAF’s report.

According to the numbers, a 30-year-old would see individual health insurance costs raise regardless of the state he or she lived in.

Pre-AHA could see premiums average around $62 per month, while the post-AHA premiums would be $187 per month, according to the AAF. Premium increases would vary depending upon state. The largest increase is within Vermont, where individuals would pay nearly a 600% increase. Individuals in Massachusetts, however, would pay a 9% increase overall.

“Vermont, Georgia, Nebraska, Arkansas, and Wisconsin. Vermont, Wyoming, Mississippi, Alaska, and Indiana all experience the highest actual dollar amount changes between 2013 and 2014,” AAF reports.

Cost increases raise general questions regarding if individual mandate will keep younger workers in the market at all.

“Although an inexact science, the numbers clearly illustrate a problem for the Affordable Care Act, the individual mandate, and the exchange system,” AAF concludes. “Premiums for those required to subsidize the system have risen too much and the mechanisms meant to defray those costs and encourage people to participate in the system are too weak. As such, a significant portion of the uninsured ‘young invincible’ population will purposefully choose to remain without coverage. Should this be the case, the American insurance market will experience widespread premium spiral.”

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