Premiums are higher due to the provisions of the Affordable Care Act
The Affordable Care Act has lead to a significant increase in health insurance premiums, according to an analysis from the Heritage Foundation. Though the Affordable Care Act was signed into law five years ago, it has only been two years since the majority of its provisions have been implemented. This has caused insurance premiums to rise dramatically for many consumers in the United States. This may not be surprising, however, as the law requires insurers to provide coverage for those with pre-existing medical conditions.
The analysis from the Heritage Foundation shows that health insurance premiums for policies sold through exchanges throughout the state have rose by 5% this year. This is quite modest when compared to the rate hike that was seen in 2014. Last year, health insurance premiums for non-group policies rose by an average of 50% nationwide. For some consumers, such as those with pre-existing conditions, rates rose significantly more, placing them under heavier financial stress.
Young consumers are paying more for their insurance coverage
According to the analysis, many of the rate hikes have hit young consumers, who are typically less financially stable, healthier, and less likely to have access to employer-sponsored coverage. In California, young consumers are expected to see their health insurance prices rise by 10% over what they were in 2014. Young consumers are seeing rate hikes because insurance companies are attempting to balance the financial burden that older, less healthy consumer represent. Young people are less likely to use their insurance coverage when compared to older demographics, which means fewer claims payouts to these consumers.
Though the Affordable Care Act has lead to an overall increase in the number of people that have health insurance coverage, it has also lead to an increase in insurance costs. Those opposing the federal law had feared that this would be the case, but the Obama administration had held to the concept that the federal law would not cause any significant increase in insurance costs.
