BNA Speaks to Manatt Associate on Age Rating Requirements
"HHS Issues Final Rule Implementing ACA's Health Insurance Market Reforms"
February 22, 2013 - Bloomberg BNA interviewed Manatt's Michael Kolber, an associate in the firm's Healthcare Division, on the final rule recently released by the U.S. Department of Health and Human Services concerning health insurance market reforms, specifically the age rating requirements.
As reported by Bloomberg BNA, the final rule prohibits insurers from charging older enrollees more than three times what young enrollees are charged for premiums. Despite requests, HHS did not delay or phase in age rating requirements. Currently, most states allow premiums for older enrollees to be at least five times greater than those for younger enrollees. In the final rule, like the proposal, premiums for enrollees will increase slightly with each year of age, from ages 21 to 63. However, states can choose to implement stronger consumer protections than the minimum standards.
In 2017, states can also choose to allow large group plans to sell through the online exchange markets, but they must apply the rating rules to those plans. Industry insiders told the publication that states will have more geographic flexibility.
Kolber said that the final rule gives states more flexibility in basing rates on geographic areas.
The proposed rule would only have allowed rates to vary in no more than seven areas per state, he said. "They're now saying states can have as many [rate zones] as the number of metro areas plus one," said Kolber. "The [proposed rule] probably would have been unnecessarily disruptive to individual and small group markets in many states without much of a benefit to consumers. The important thing with these rating areas is that they're sufficiently large that plans aren't able to discriminate based on health status."