The proposed "age rating" would hike health care premiums
Congress is currently debating legislation that would allow insurance companies to increase premiums for older people. They call this "age rating." But don't be fooled by the name. Age rating is just another way of imposing an age tax on older Americans.
Under current law, insurance companies can charge older people ages 50 to 64 no more than three times what they charge younger people for the same coverage. But this congressional proposal would allow them to charge five times as much or even higher, pushing more of their costs onto hardworking Americans while making it more difficult for older people to afford the health care they need.
Prior to passage of the Affordable Care Act (ACA), insurance companies were often free to charge older Americans more than five times what they charged younger ones for health insurance premiums. Some companies were charging older adults up to 10 times the amount they charged younger people for the same coverage. AARP and others thought this was wrong and fought to change it. As a result, Congress set the age rating limit at 3 to 1.
The proposal Congress is now considering — to increase-the age rating ratio to 5 to 1 (or more) is nothing more than an attempt to boost insurance company profits at the expense of older Americans.This is simply not fair. Older Americans already spend $1 of every $6 on health care. They can't afford to spend more.
A new study sponsored by the AARP Public Policy Institute shows that increasing the age rating ratio to 5 to 1 would increase annual premiums for adults 60 and over by an average of $3,200-raising their average annual premium to $17,900.
To put this in perspective, older people who buy coverage in the individual health insurance marketplace have a median income of only $20,000. The annual minimum wage salary is $15,080, and the average annual Social Security benefit for retired workers is $16,176. Charging older adults five times more for health insurance premiums is not only unfair, it's unaffordable.
But it gets worse. Current law provides subsidies to those who cannot afford health insurance coverage. The new bill could cost older Americans who can least afford it up to $8,400 more than they pay now. This simply doesn't make sense.
Providing less help to afford coverage while charging five times more will return us to the days when health care was unaffordable for older Americans. Congress should be working to make health insurance more affordable for all Americans.
I urge you to contact your elected officials in Congress and tell them to oppose allowing insurance companies to charge older Americans thousands of dollars more for health insurance. Charging older people an age tax just to line the pockets of the insurance companies is not the way to lower health care costs, nor is it a way to fix the health care system. To learn more, go to aarp.org/noagetax.