Young adults likely will face sticker shock when mandatory health insurance becomes law.

Health insurers say that health-insurance rates for young adults in Arizona likely will spike when mandatory coverage starts in four years.

Under reform legislation passed last month by Congress, older adults cannot be charged more than three times as much as younger adults just based on age. Such restriction on “age-rating” likely means that younger, healthier adults will subsidize health insurance for older adults when mandatory coverage begins in 2014, health insurers say.

That reverses a long-standing industry practice: Those who use health care the most should pay substantially more for insurance.

Blue Cross Blue Shield of Arizona, Arizona’s largest health insurer based on revenue, predicts that health insurance for adults in their 20s could increase 30 percent or more once reform starts. Other health consultants and industry groups also predict price spikes for young adults.

Those higher rates will likely come as a shock to young adults because so many choose not to purchase health insurance, but they will be required to buy insurance under reform.

“Younger and healthier people pay less for insurance now,” said Jeff Stelnik, Blue Cross’s vice president and chief actuary. “With federal reform, younger individuals will need to subsidize those over 50. In essence, they will be paying more than their fair share.”… (more…)