Last week Congressman Phil Gingrey (R-GA) and Jim Matheson (D-UT) introduced H.R.455  Letting Insurance Benefit Everyone Regardless of Their Youth- or the Liberty Act, bipartisan legislation to address the impact that the Patient Protection and Affordable Care Act (PPACA) age-rating rules have on young invincibles.

PPACA stipulates that January 1, 2014 state insurance markets must conform to cookie-cutter age rating standards of 3-to-1.This means that the oldest enrollee can only be charged three times that of the youngest enrollee--with no consideration given to current market standards. This provision will force 42 states to implement an overnight change that will result in drastic premium increases and “rate shock” for its citizens.

Federal and state policy makers-alike are concerned that the younger and healthier portion of the population will leave the health market and skew it by opting to pay the penalty rather than the cost of coverage.

The Liberty Act will help by:

  • Changing the age rating standard from 3-to-1 in PPACA to a rate of 5-to-1.
  • Giving states the flexibility to determine their own age-band or default to 5-to-1.

Now is the time to contact members of congress and ask for support for this bill.  Although age-rating is not the only factor in the rising cost of health care and premiums, this legislation is an attempt at helping to control a portion of the rising costs.

*Information obtained from the National Association of Health Underwriters