Tax and Age-Rating Restrictions May Lead to Higher Insurance Premiums
- By BSTQ Staff
Under the Affordable Care Act (ACA), the health insurance sales tax and age-rating restrictions will increase premiums for many, according to a report by Oliver Wyman, a management consulting firm.
The study shows the new sales tax included in the ACA will increase the cost of healthcare coverage for consumers and employers in all 50 states. It also will affect Medicare Advantage beneficiaries and Medicaid managed care programs. The tax will start at $8 billion in 2014, rise to $14.3 billion by 2018 and is projected to surpass $100 billion over the next 10 years.
In addition, the age-rating restrictions will affect the affordability of healthcare coverage for younger individuals. The ACA implements a 42 percent increase in premiums for people between the ages of 21 and 29 and a 31 percent increase for those between the ages of 30 and 39. According to the study’s authors, if younger, healthier adults choose not to purchase insurance, the individual consumer market will be destabilized, premiums will increase across the board, and overall enrollment will decline.
