Thursday, February 14, 2013

Under 30? Obamacare Needs You

Oh to be young again...Well maybe not where health insurance premiums are concerned. As I had mentioned in a previous post, health insurance premiums are certainly going to be increasing for a number of people. Those under the age of 30 are potentially going to endure the brunt of that.

One of the reasons will be the change in ratios that are used by insurance carriers for  premium costs. Insurance carriers use age tables to determine premium. The highest premium is for the oldest person, and the lowest premium for the youngest person. Currently, premiums run at about a 6 to 1 ratio, meaning that the oldest age bracket's premium is six times that of the youngest age bracket. As a simple example, using a 6 to 1 ratio: The top premium (highest age bracket) is $600, and the low premium (youngest age bracket) will be $100.

Under the Affordable Care Act that ratio is reduced to 3 to 1. So now, the top premium will be $450 for those older folks and the low premium will be $150 for those young folks. This example is hypothetical of course until we actually know what the real rates will be. But if you do the math here, it clearly is a 50% increase in the lowest age tier. Unpleasant to say the least.

The good news is for those under 30 and folks with proven hardships there will be a catastrophic health plan available that will probably be your lowest price option. In addition the income qualifications are in place for subsidized government (taxpayer) paid premiums as well as cost share reductions for health plan out of pocket costs for those that qualify.

The younger American is truly needed in the overall scheme of the health plan. Without enough of them enrolled in the program the premiums will see significant increases as those with dire health problems strain the system for payment of claims. As the President would say, "We all need to pitch in and pay our fair share". Uncle Sam Needs You !

REALLY...its the only way this will work. Until next time.



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