Health Care Reform

Frequently Asked Questions

Affordability of health care

1. Does reform lower health care costs or premiums?

2. As a young healthy adult, will my premiums be lower after reform?

1. Does reform lower health care costs or premiums?
The Patient Protection and Affordable Care Act does little to address the key drivers of rising health care costs, which, at $2.5 trillion annually, or more than 17% of our GDP, could eventually bankrupt our country. Many reforms that could lower costs or improve quality will not take effect until 2014, but many provisions that will add costs for insurers and the insured begin this year: requiring coverage of dependents on a family policy up to age 26, developing standard benefits booklets to be used by all health insurers, and requiring that health plans include a specific set of “essential” benefits.

In addition, the law proposes a fee on insurers estimated at $70 billion over 10 years, beginning in 2014. Most experts believe that the only way for insurers to absorb these fees will be to pass along the costs to customers.

2. As a young healthy adult, will my premiums be lower after reform?
The law says that an insurance company cannot set the premium for an older adult more than three times higher than the premium it charges a young adult. In other words, the ratio of the older persons premium to the young adults premium is 3:1. This would increase premiums for young adults by 35%, according to research by actuarial consultants Oliver Wyman, Inc. according to health care policy experts, the lowest workable ratio is 5:1.