|Age Ratings Focus Of BCBSA Commissioned Analysis On Cost Impact
A 2 to 1 age rating ratio would increase premiums for
the youngest and healthiest Americans in the individual market in many
states by nearly 50 percent in the first year, according to an analysis
the Blue Cross and Blue Shield Association (BCBSA).
The release of this new analysis is likely a reaction to
the states that permit health plans to vary premiums based on age by 5
to 1 and as another piece of information in the health reform debate,
Allowing age adjustments more restrictive than 5 to 1
would cause "dramatic premium spikes for the young and healthy in the
individual insurance market making coverage unaffordable for many," the
Some 42 states now permit health plans to vary premiums
based on age by 5 to 1 or more, the association noted, the primary
benefit being that premiums are kept affordable for younger individuals
to encourage broad participation.
The association said it believes that if more
restrictive age ratings are implemented, younger people would "opt-out
of purchasing coverage." The analysis, prepared by Oliver Wyman’s
Actuarial and Health and Life Sciences practice, estimated that over a
five-year period more than 1 million younger members would leave the
market thereby causing a 10 percent premium increase overall for
individuals in some parts of the country.
Addresses: Blue Cross Blue Shield Association, 225 North Michigan Avenue, Chicago, IL 60601; www.bcbs.com. Oliver Wyman Actuarial and Health and Life Sciences, 3475 Piedmont Road NE, Atlanta, GA 30305; (404) 239-6431 www.oliverwyman.com.