Research shows that millennials are facing higher insurance premiums
Health insurance coverage has become more accessible in the United States due to the Affordable Care Act, but the federal reform law has also lead to a significant increase in insurance premiums. Research from the Heritage Foundation has found that insurance premiums have increased, especially for millennials that have received coverage through exchanges. These exchanges have succeeded in offering coverage to consumers, but premiums continue to rise and place some people under greater financial strain.
Premiums for young consumers are on the rise nationwide
The research shows that millennials were more affected by increases in premiums than other demographics. On average, premiums for this group increased by 5.3% from 2014 to 2015. For those 27 years old, premiums rose by an average of 8.46% during the same period. In some states, rates rose by a much more significant degree. In Alaska, for instance, premiums increased by an average of 28% for younger consumers, whereas rates for older consumers in the state rose approximately 24%.
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Millennials may be the best way for insurers to recover from losses
Millennials may be more likely to see their insurance premiums grow because they are generally healthy individuals that do not use their coverage often. Older consumers tend to use their coverage because they have health issues that need medical attention. This translates into losses for insurance companies as they must pay for claims. In order to recover from these losses, insurers raise rates on the coverage provided to younger people. This is only one factor that could have an impact on insurance premiums, however, and other factors also play a role.
Subsidies are falling behind in making health insurance affordable
Health insurance exchanges have managed to provide relatively inexpensive coverage to many people. This coverage is made affordable through the availability of subsidies from the federal government. The subsidies have managed to help some people handle the premiums of their policies, but premiums continue to grow, making coverage more expensive overall.