Limits on Age Differentials Will Penalize Young

Good article in Washington Post yesterday pointing out that the health care reform bill’s restriction on age based premium can only vary by a factor of 3 means that young insured adults will be subsidizing older insured adults.  This change has the largest impact on young adult males ; they have low costs actuarially, so in the past were able to purchase very inexpensive insurance (as long as they had no preexisting illness).

There is no free lunch. Restricting the ratio between the highest and lowest health care premium is great for those on the upper end – but this ‘compression’ of rates means higher rates for those at the lowest risk.  In the end, we have to manage the total costs we incur – just shifting costs from one group to another is painful, and threatens to be a “wedge” issue to make health care reform less popular.