Below, a guest-post by Kev Coleman, head of research and data at HealthPocket http://blog.healthpocket.com/ I recently stumbled onto his blog, and now read it regularly. Coleman does an impressive job of crunching the numbers on health care and health care reform—with some surprising results.
Under the Affordable Care Act (ACA) insurers can charge older Americans up to 3 times as much as they would charge a 20-something for exactly the same policy. That might sound steep, but today, in many states, insurers can charge older customers 5 times as much.
Some politicians and industry analysts have predicted that because the ACA limits the ratio to just 3:1 (or 300%) , this will would drive up health insurance premiums for younger enrollees, particularly those in their twenties.
To determine the credibility of that prediction, HealthPocket examined over 20,000 premium quotes within the individual & family insurance market for men and women ages 23, 30, and 63.
We found that in 14 states the average 63-year-old now shells out more than three times what a 23 year old pays. But in six of those states his premium exceeded what a younger customers by less than 310%. In other words, in these states the 63 year old is paying just slightly more than he would under the ACA.
Moreover, the typical 63 year old was not paying 4 times as much as the 23 year old in any of these states. The most expensive state for the average 63-year was Delaware, where his premium would be 382% higher. And Delaware is an outlier. Nationally the difference in premiums between applicants age 63 and applicants age 23 averaged just 260%, making it unlikely that the ACA’s 300% limit on age-adjusted premiums will be a factor that drives younger Americans premiums skiy-high.
However, these averages mask the differences in premiums between men and women. The majority of states allow insurers to offer women and men different premiums even if the women and men share the same age, health status, and smoking status.
[As I have reported in the past, when women buy their own health insurance in the individual market, they must lay out an extra $1 billion a year, simply because they are women. Insurers explain that women cost them more, even if policies don’t cover maternity, because “they are more likely to visit doctors, get regular check-ups, take prescription drugs, and have certain chronic illnesses.” In other words, women are penalized for taking care of themselves. MM]
HealthPocket’s analysis reveals that female health insurance applicants average higher insurance premiums at age 23 than men of the same age. When comparing 30 year-olds to 23 year-olds, 30-year-old women faced an even higher gender-adjusted premium.
But surprisingly, at age 63 this situation reversed. 63 year-old men faced higher age-adjusted premiums When compared to 23 year-olds of the same gender, 63 year-old men paid premiums that were 317% higher while 63 year-old women paid premiums that were 203% higher.
To learn more about what HealthPocket discovered—and its methodology—see HealthPocket’s complete review of the effect of age and gender on health insurance premiums.