Under Obamacare, Age Will Make a Difference in RatesPosted by Adam Andrews on August 13, 2013
With the big changes on the horizon for the health insurance industry, there are many things that will be extremely different than the way things work today. For example, individual policies will no longer be able to exclude subscribers due to pre-existing conditions. This means that older people, who have not reached age 65 and can qualify for Medicare, will still be able to get insurance under Obamacare.
However, this does not mean the insurance companies have to charge the elderly the same rates as they charge 21-year-old young adults. Insurance companies are able to charge older policyholders as much as three times the premium they charge for that 21-year-old person. This is still a bargain, considering insurers were allowed to charge as much as they wanted for elderly people before the reform law was enacted.
Unfortunately, it does not appear this law will cause a major price drop for older consumers. According to some rates that have already been released in some states, premiums for a 60-year-old policyholder will be higher than they were for 2013. These higher rates stem from the mandate requiring insurance companies to allow people with pre-existing conditions to gain coverage.
Still, in states where some of these mandates were already in place, the rates for the elderly may not go up. These states include Massachusetts, New York, New Jersey, Washington, Vermont and Hawaii. In addition, there will be a smaller gap between high and low rates when the Affordable Care Act goes into effect because the plans will be more standardized than they currently are.
In the end, if premiums are to stay relatively low for everyone, a high number of young people will need to participate in the exchanges. Right now, there are a high number of young adults who are going without insurance. If they choose to continue that trend by paying the fine instead of buying insurance, premiums for the elderly will continue to rise for the foreseeable future.Was this helpful?
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