The Obama administration sticks to its restrictions on what insurers are allowed to charge.
The federal government has now finalized a regulation for health insurance companies that is designed to safeguard consumers through tighter restrictions on what those insurers are allowed to charge older beneficiaries.
The government made the decision despite warnings from the industry that everyone else may need to pay more.
Health insurance companies have warned the Obama administration that if older customers are not allowed to pay more for their coverage, then younger policyholders may see their premiums rising in order to compensate for the costs. The Department of Health and Human Services issued a rejection to the request that was made by the industry to phase in a new healthcare reform that would stop insurers from being able to charge older policyholders premiums that are any more than three times higher than those of their younger counterparts.
This limit is called the health insurance 3:1 ratio and will become effective on January 1, 2014.
It is one of the regulations that is being applied to the health insurance markets for individuals and small businesses and is one of the central elements of the consumer safeguards that were a part of the Affordable Care Act in 2010. These healthcare reforms will also prohibit insurers from being allowed to discriminate on the basis of pre-existing conditions and gender.
It has become standard practice for health insurance companies to charge higher premiums to adults over the age of 50 years. The industry made a request to the HHS to begin 2014 with a ratio of 5:1 that would then work its way down to the more limited 3:1 ratio over time. They claimed that by implementing this regulation in a gradual way, it would stop the premiums for younger policyholders from suddenly spiking.
According to a trade organization called America’s Health Insurance Plans, “The new restrictions on age rating will result in an overnight increase in health care costs for people in their 20s, 30s, and early 40s,” as per a statement from the president of the organization, Karen Ignagni.