Joel Ario Discusses Health Insurance Age Rating Bands
"Former HHS Official: Precedent for Age Band Phase-In, but HHS Doesn't Have Flexibility"
Inside Health Reform
October 10, 2012 - Manatt's Joel Ario, a managing director with Manatt Health Solutions, spoke to Inside Health Reform about Congress's decision to initiate the health law's 3:1 age band immediately in 2014.
Inside Health Reform reports that the 3:1 age band will stand because the Department of Health & Human Services lacks authority to phase in the requirement. However, the insurance industry claims a phase-in of age rating compression is needed to prevent "rate shock" for young consumers, and the industry thinks HHS has the flexibility to establish a transition period for the health law requirement that says older individuals can't be charged more than three times what younger individuals pay in premiums.
Compressing the bands, which currently vary by state, was a key priority for AARP, which had called for a 2:1 ration. Insurers sought a 5:1 age band.
Ario, former director of HHS' Office of Health Insurance Exchanges, said there is precedent for phasing in tighter age bands, but the decision when the health law was passed was not to do a phase-in, though it had been discussed at the time.
Ario, who previously was Pennsylvania's insurance commissioner, added that typically age bands are grouped in five-year increments, so one band, for example, could be for individuals 19 to 24 years old and the next band would be for those 25 to 30. As an individual ages, when they enter a new band, premiums based on age would increase. Ario said he does not know of anyone that does one-year bands, which runs counter to what some consumer advocates want HHS to do when it issues regulations.