This research paper reviews individual market premium-setting rules prior to and after the advent of the Patient Protection and Affordable Care act and summarizes existing research of various age banding restrictions on health insurance premiums and enrollment. It also analyzes the potential impact of moving from a 3:1 to 5:1 age band structure on the individual marketplace, holding all other assumptions constant, and compares the 3:1 and 5:1 age banding structures in a scenario in which tax subsidies for purchase of individual policies on state exchanges are discontinued. The paper then compares the results to prior studies and discusses the implications of the results on policymaking.

This report was commissioned by AARP.