February 19, 2013

Health law's backers fear higher costs

The Affordable Care Act's basic protections threaten to drive up premiums for some Americans.

By NOAM N. LEVEY Tribune Washington Bureau

(Continued from page 1)

The health-care law also includes a new tax and new fees on insurance companies that the industry says it will pass on to consumers.

The provision that will prevent insurance companies from charging older consumers more than three times what they charge young consumers has generated particular concern among regulators.

The requirement is designed to make insurance more affordable to a group that often most needs insurance. But as rates come down for older people, they may increase for consumers in their 20s, regulators worry.

If that happens, young, healthy people could elect not to get health insurance and pay the small penalty.

That, in turn, would leave an older, sicker population in the insurance pool, which typically inflates premiums.

To avoid so-called rate shock, regulators in California, Oregon, Rhode Island and other states have asked the administration to phase in the new requirement over several years.

Administration officials have said they cannot postpone the rule because the law requires it to go into effect in 2014.

They point to provisions in the law designed to shield consumers in their 20s from higher premiums. Those under 26 can remain on a parent's plan. The law also includes a slimmed-down health plan for people under 30 that is expected to cost less.


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