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- Frequently Asked Questions
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Frequently Asked QuestionsAffordability
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 percent of our GDP, could eventually bankrupt our country. Many reforms that could lower costs or improve quality will take effect in 2014, but many provisions that will add costs for insurers and the insured have already begun, such as requiring coverage of dependents on a family policy up to age 26, developing uniform Summary of Benefits and Coverage forms to be used by all health insurers, and requiring that health plans include a specific set of essential health benefits for individual and small group coverage.
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 person’s premium to the young adult’s premium is 3:1. This would increase premiums for young adults by 35 percent, according to research by actuarial consultants Oliver Wyman, Inc. However, according to health care policy experts, the lowest workable ratio is 5:1.