How Turning 21 Will Cost You Under the Affordable Care Act

21There are many precious milestones we excitedly anticipate in life – driving a car at 16, registering to vote at 18, and buying your first beer at age 21. I’ll bet you never considered that 21 could end up costing you money, especially if you have a new health plan through the Affordable Care Act (ACA).

Since the ACA has been instituted, health insurance carriers can no longer charge higher premiums or deny individuals coverage because of pre-existing conditions. Plan rates are calculated based on four determining factors: how many family members will be covered on the policy, your age, your location, and if you smoke tobacco. Turning 21 under the ACA is no reason to celebrate!

Beware of Age-Specific Rate Increases

When premiums are calculated, rates go up depending on your age. All young adults and children under age 21 are given the same rate. So you won’t pay any more for insurance on an 18 year old than you would a 2 year old. However once a young adult celebrates their 21st birthday, the rates go up – substantially! The estimated rate increase upon turning 21 is 58 percent.

If you have a health plan that your purchased for yourself through the Connect for Health Colorado marketplace last year and you’ll be turning 21 in 2015 or if you’re covered under your family’s health plan, you could save money by looking at various plan options in 2015 and possibly changing plans. You should also have your premium subsidy recalculated.

If you simply auto-renew your health plan, the premium subsidy you receive in 2015 will remain the same as 2014, although the 58 percent premium increase will be tacked on to your monthly premium. I explain the risk of auto-renewing your plan more in a prior blog, The Risk of Auto-Renewing Your Health Insurance Plan. If you take the time to review your options and have your premium subsidy recalculated, you could find a less expensive plan while also increasing your subsidy. The alternative is paying the enormous 58 percent rate increase – and no one wants to do that!

Getting Help with Your Insurance Choices

Health plan enrollment ends February 15, 2015 in Colorado. Our Advisors are certified to offer plans through the Connect for Health Colorado marketplace or you can look for plans by visiting our How-to-Apply web page. If you miss the enrollment deadline, you’ll only be able to sign up for a plan if you qualify for a special enrollment period, so don’t miss out!

Do you have any questions about rate increases? Do you need help signing up for a plan for 2015? Our Advisors are available to help you through the process.

  Date posted: Friday, January 30th, 2015
Category: Health Care Reform

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