Age tax on health insurance is unfair, unaffordable

By Cathy MacCaul
Recently, members of Congress quietly introduced a bill designed to allow insurance companies to charge older workers five times what other consumers pay for the same health insurance policy. Supporters of the bill call it “age rating.” They can call it whatever they want, but the truth is it’s an unfair tax on older workers that would line the pockets of big insurance companies.
This legal form of discrimination is priciest for Americans age 50 to 64, who are still too young for Medicare. Under HR 708, the “State Age Rating Flexibility Act of 2017,” the average 60-year-old would pay more than $3,000 per year in health insurance premiums, according to an AARP-sponsored analysis. Their insurance premiums could reach up to over $17,900 year. That is outrageous, and it’s why AARP is opposing this unfair age tax. If this bill becomes law, it could potentially force Washingtonians age 50 to 64 to dig a lot deeper into their pockets to pay for health insurance.
Even now, many Americans in the age 50-to-64 range are hard-pressed to handle their healthcare bills and are no better able than other consumers to absorb a jolt in this expense. The economy may be improving, but who is in a position to absorb an insurance premium increase of more than $3,000?
And it wouldn’t just be individuals picking up the tab. Further weakening the consumer protection on age rating would ratchet up the government’s own healthcare costs. AARP researchers have found that if the age tax was increased, taxpayers of all ages would have to spend an extra $6.7 billion in assistance for older Americans who need extra help.
The current cap, which limits insurers to charging older consumers no more than three times the amount charged to younger consumers, is part of the Affordable Care Act. Under the ACA, the number of uninsured Americans age 50 to 64 has fallen in half – a real achievement that deserves far more attention.
Instead of increasing profits for insurance companies, AARP believes Washington, D.C. should focus on reducing healthcare costs for everyone, such as by cracking down on drug companies’ high prices.  For example, Congress could pass legislation to allow Medicare to negotiate with drug companies for lower drug prices. And legislators could reduce barriers to global price competition by allowing for the safe importation of lower-priced drugs. There is no reason for Americans to continue paying the highest prescription drug prices in the world.
On behalf of our more than 950,000 members in Washington, AARP is committed to working with elected officials of both parties to find responsible solutions for the problem of rising healthcare costs. If you agree that it is a bad idea to force older consumers to pay thousands of dollars more for their care, please contact your members of Congress and ask them to stand up for older workers, not insurance companies, and declare their opposition to the State Age Rating Flexibility Act of 2017.

Cathy MacCaul is AARP Washington’s advocacy director.


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