Continuing Wall Street Journal reporter Anne Tergesen’s excellent piece on the Affordable Care Act–headlined The Health-Care Overhaul: What You Need to Know:

Young Subsidize Old

“Although the Obama administration recently gave employers subject to the law a one-year reprieve, to 2015, on a requirement that they provide coverage for workers or pay a penalty, nothing has changed for individuals: Many who aren’t eligible for coverage through an employer, Medicare or Medicaid must purchase a policy for 2014 or face tax penalties: the greater of $95 or 1% of income. (In 2016, the penalties are scheduled to rise to the greater of $695 per adult or 2.5% of income.)

“The policies that take effect in January will offer more comprehensive coverage and greater financial protection than many plans on the individual market today, says Timothy Jost, a law professor at Washington and Lee University in Lexington, Va. That should help older consumers, who tend to spend more on health care, he adds.  Premiums are likely to fall for those in their 50s and 60s compared with what they pay for similar policies today, says Prof. Jost. With the exception of tobacco use, insurers can no longer charge higher premiums based on health status, nor can they charge the oldest consumers more than three times the average premium paid by a 21-year-old.

“Linda Blumberg, a senior fellow at the Urban Institute, a nonprofit public-policy research organization in Washington, D.C., estimates that this 3-to-1 rule will, on average, save someone age 57 or older buying single coverage about $1,800 in annual premiums, considering that this age group currently pays an average of five times more.

“Of course, the law’s critics say lower premiums for older adults are by no means a sure thing. If large numbers of younger, healthier people opt to pay penalties rather than buy insurance, that could drive up the cost of coverage in 2015 and beyond for those who remain in the market.”

Up next: Tax Credits