This Urban Institute brief examines the effects of age rating rules under different versions of congressional health care reform.  It uses Health Insurance Policy Simulation Model (HIPSM) to compare the financial implications of the differing age rating ratios (5:1, 2:1, and 1:1) which would control the price disparity between older and younger adults’ premiums.

From the summary:

The authors find that there is little difference in overall health insurance coverage or aggregate spending under reform, regardless of the premium rating option chosen. However, practical affordability of total health care costs (premiums and out-of-pocket expenses) will be strongly related to premium rating rules for those individuals and families with incomes too high to qualify for federal subsidies, particularly those with incomes between 400 and 500 percent of the federal poverty level. For many older adults and older families, the higher out-of-pocket costs that come with greater medical use in older age, combined with high premiums due to steep age rating (such as 5:1 bands), would lead to a high burden of total health care costs relative to income.

Full report:  Timely Analysis of Immediate Health Policy Issues (PDF | 319.08 KB)

The Urban Institute.  (2009). Timely analysis of immediate health policy issues. Blumberg, Linda; Buettgens, Matthew & Garrett, Bowen.