Insurers have been warning that the reform law's age-rating provision will cause "rate shock" among consumers, particularly young adults. But a new report from the Urban Institute says those fears are overstated.
Even Humana's CEO Bruce Broussard has joined the conversation, predicting that rules limiting how much higher insurers can charge their older members could drive up premium costs, making health coverage unaffordable for young adults who could choose to go uninsured and increasing costs for older, sick consumers.
Although the Urban Institute analysts agree that premiums will indeed grow for younger consumers, they said out-of-pocket costs won't rise simultaneously because most young consumers will qualify for some government-funded or reform-related insurance, whether Medicaid, Children's Health Insurance Program, subsidies available through insurance exchanges or their parents' plans, according to the report.
"While the [reform law] will increase costs for young adults and families purchasing such coverage, the out-of-pocket implications of this provision have frequently been over-stated," the Urban Institute analysts said.
But a separate report released by some Republican lawmakers asserts that premiums for individual policies will grow by as much as 40 percent, primarily impacting young adults and middle class families who won't be eligible for reform subsidies.
The Congressional analysis found premium increases will be a result of the reform law's individual mandate, essential health benefits that insurers must cover, and new taxes and fees on insurers.