Study: Neighbors’ Illnesses Could Drive Up Some Healthy Hoosiers’ Premiums
|Targeted News Service|
Under the Affordable Care Act (ACA), healthy Hoosiers who buy health insurance from the exchange might pay significantly more in premiums because of the poor health of their neighbors, says a new policy brief from
"Basically, there are two questions Hoosiers want answered," said
In addition to Hicks, the CBER research team included
Researchers examined the ACA's impact by studying actuarial estimates that are used to calculate regional rates for health insurance under a number of plans, including bronze, silver and silver plus.
"The answer to the first question is yes, as households pay for the ill health of residents within their county," Lewis said. "These costs are not trivial. All things being equal, the additional health care expenses of living in the highest diabetes incidence rate county in the state costs a household an additional
"The cost increases by more than
Hicks points out that before the implementation of the Affordable Care Act,
Companies were also free to vary rates by geography due to changes in health care costs. Insurance companies weighted these factors as they saw fit to determine the premiums for individuals.
"This meant that, due to lower perceived costs, a young and healthy man who did not smoke could be paying substantially less than an older female with a tobacco habit," Hicks said. "The state set no restrictions on the variability between these two premiums. Health insurance was regulated primarily by the free market."
However, the incident of chronic diseases such as diabetes had more impact on a county's rates than whether it was rural or urban. Location had little to no impact on rates.
"The Affordable Care Act, or Obamacare, is an enormously complex piece of legislation impacting almost one-fifth of the U.S. economy," Hicks said. "Though the results of its implementation are not yet clear, it is certain that it will change the way health insurance is bought and sold in
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