Even with a 3 to 1 ratio, older people will pay a lot more in absolute dollars than younger people. A few years ago I shopped The Connector, the exchange in Massachusetts that was a model for Obamacare, and which allowed a 2 to 1 ratio between what older people can be charged vs. young people. There I found that a 54-year old couple in Pittsfield would spend $2,252 per month for a premium HMO from Blue Cross Blue Shield, while a 34-year-old couple there would pay $1,649. Differences even higher than these will be apparent in all states next year, when the 3-1 ratio takes effect.
And you can imagine the differences with a 5-1 ratio. Young people often don’t have a lot of money. But what is less appreciated is that old people often don’t either.
That’s part of the rate story too, but one AHIP has so far not chosen to tell. When older people find they can’t afford high premiums, they also might decide not to buy insurance. Will that be a good or a bad thing for insurers? Or for the healthcare system overall? Or for Americans young now who will be old later? Reporters need to raise those questions, too, and they shouldn’t wait for wait for AHIP to tell them the answers.
The Second Opinion, CJR’s healthcare desk, is part of our United States Project on the coverage of politics and policy. Follow @USProjectCJR for more posts from this author and the rest of the United States Project team. And follow Trudy Lieberman @Trudy_Lieberman.
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Health Reform Lessons from Massachusetts Part V
Missing from this discussion is whether a healthy young working person should take out health insurance under the Affordable Care Act. With the small penalty for skipping coverage and the ban on non-coverage for pre-existing conditions, the optimum strategy for a young person (whether at 3-1 or 5-1) is to forego coverage and purchase it if they develop a medical condition (or have an accident) that will result in meaningful medical costs.
#1 Posted by Jerry, CJR on Mon 25 Feb 2013 at 04:15 PM
Also missing from this discussion is the fact that most 20 somethings and probably a sizable percentage of 30 somethings will be eligible for full or substantial premium subsidies through the state insurance exchange because their incomes are below 400 percent of poverty. Saying their premiums will go up doesn't mean much if anything to them if the subsidy is going to cover most or all of their premium anyway. That has to be mentioned prominently in this discussion. I've seen some good coverage of this, in the Washington Post or Kaiser Health News or perhaps even NPR's Julie Rovner.
#2 Posted by Harris Meyer, CJR on Mon 25 Feb 2013 at 06:01 PM
Also missing from this story is the fact that people under 30 years old who are financially stressed have two other options. Anyone shy of their 26th birthday can gain coverage from a parent's workplace plan. If that isn't an option and the subsidies still leave the coverage unaffordable, those under 30 can buy low-cost catastrophic health plans with high deductibles. All of these options simply shred the rate-shock argument being shamelessly peddled by the health insurance industry. The greed that dictates what happens in health insurance companies is boundless.
#3 Posted by Martin, CJR on Tue 26 Feb 2013 at 09:11 PM