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Home / News & IndustryManaged Care Insight and Analysis
Updated: January 19, 2010
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, observers believe.

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 BCBSA said.

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; Oliver Wyman Actuarial and Health and Life Sciences, 3475 Piedmont Road NE, Atlanta, GA 30305; (404) 239-6431

  This article was taken from:
The Executive Report on Managed Care

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