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Affordable Care Act's impact not uniform

KINGMAN - Insurance premium rates will increase for a majority of workers at small businesses that offer health insurance, according to a new report released this week to Congress by the non-partisan Office of the Chief Actuary at the Centers for Medicare and Medicaid Services.

The report notes that because of new provisions in the Affordable Care Act, which went into effect in January, about 11 million of the total 17 million workers who now receive coverage in the fully-insured small group health market will see an increase in their premiums.

On the other hand, about six million workers are estimated to have lower premiums because of the new provisions.

No estimates were available on the amount of the increases or decreases.

The report was commissioned through the Department of Defense and Full-Year Continuing Appropriations Act of 2011 to provide an estimate of how many workers in small businesses will see premium changes because of three new provisions in the ACA. The first is fair health insurance premiums, which means rates may only be varied because of individual or family enrollment, geographic area, age and tobacco use. The other two are guaranteed issuance and renewability of policies.

Prior to 2014, insurers could set lower premiums for small businesses with younger and healthier employees, and significantly higher rates for small businesses with older and sicker employers. The ratio of premiums charged between old and young ages was typically 5:1 or more. Also, gender could be used as a rating factor, and small businesses with more women of childbearing age were commonly charged higher premiums.

The ACA's new provisions prohibit the use of gender, health status and claims history as rating factors, and restrict the premium rating ratio to 3:1 for adults.

According to the report, the changes may relieve the financial burdens for older and sicker individuals, as coverage could become more affordable for them.

But premiums could increase for younger and healthier individuals since health status is no longer permitted as a rating factor.


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