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Milliman: PPACA rules may cut rates for some

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The new Patient Protection and Affordable Care Act (PPACA) commercial health insurance pricing rules could help healthy women in their 40s and healthy men in their 60s cut their health insurance costs by about 20 percent.

To compensate for those reductions, insurers would have to increase rates for women ages 20 to 24 about 20 percent and for men ages 20 to 39 by about 50 percent to 60 percent.

Actuaries at Milliman have published those estimates in an analysis of how major PPACA provisions could affect consumers’ premiums.

In one section of the analysis, the actuaries looked at the effects of a provision that will require health insurers in the individual and small-group markets to charge men and women the same rates, and another provision that will limit insurers in those markets to charging the oldest insureds only three times as much as they charge the youngest adult insureds.

The rules are supposed to take effect in plan years starting on or after Jan. 1, 2014.

America’s Health Insurance Plans (AHIP) has posted a copy of the analysis on its website.

The pre-2014 and post-2014 price comparisons are not strictly comparable because, in many states that allow medical underwriting, only healthy people can qualify to buy health coverage, and people with conditions such as diabetes may not be able to buy ordinary commercial health coverage at any price.

The actuaries noted in the analysis that they included the effects of PPACA premium subsidy provisions in their impact analysis.

But the Congressional Budget Office has found that about 40 percent of the people who are buying individual coverage today likely would not qualify for the PPACA subsidies if the subsidies were available now, the actuaries said.

Other provisions, such as a provision requiring insurers to offer a broader benefit package, might help provide benefits for some but lead to increases in premiums for others who may not want the extra benefits, the analysts said.

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