New ACA Age Banding Guidelines Impact your Clients

by Mist Baker
New ACA Age Banding Guidelines Impact your Clients

The new age bands and formulas take effect January 1, 2018 in the individual and small group markets. Those securing new coverage in 2018 will be subject to the new rate formulas and for those already covered, the new formulas will apply at the contract renewal in 2018.  With the implementation of the ACA, premium rating is now based on a 3 to 1 ratio for adults, while creating age bands for each single age, as well as one for 0-20 and one for 64+. 

This current rating methodology has caused issues for the insurers and members due to the jump in premium when a member goes from age 20 to age 21. The new rating methodology provided in the final rules updates the child age rating structure to better align with the actual health risk of dependent children under age 20 and to provide a more consistent premium scale as members move from age 20 to age 21.

This will have the most impact on those under 21, especially families with multiple children as Child age bands for plan years or policy years beginning before January 1, 2018, a single age band for individuals age 0 through 20. 

This translates to a single age band for individuals age 0 through 14 and one-year age bands for individuals age 15 through 20. Adult age band shave one-year age bands for individuals age 21 through 63. 

How does this translate into rates? 

Age
Premium Ratio
Age
Premium Ratio
Age
Premium Ratio
0-14 0.765 31 1.159 48 1.635
15 0.833 32 1.183 49 1.706
16 0.859 33 1.198 50 1.786
17 0.885 34 1.214 51 1.865
18 0.913 35 1.222 52 1.952
19 0.941 36 1.230 53 2.040
20 0.970 37 1.238 54 2.135
21 1.000 38 1.246 55 2.230
22 1.000 39 1.262 56 2.333
23 1.000 40 1.278 57 2.437
24 1.000 41 1.302 58 2.548
25 1.004 42 1.325 59 2.603
26 1.024 43 1.357 60 2.714
27 1.048 44 1.397 61 2.810
28 1.087 45 1.444 62 2.873
29 1.119 46 1.500 63 2.952
30 1.135 47 1.563 64+ 3.000

 

Here is the official publication.  Stay tuned to Benefitmall’s www.healthcareexchange.com for more information on changes to the ACA.  

 

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