Health care overhaul bills would keep age-based premiums

WASHINGTON — The older you are, the more you usually pay for health coverage, and that’s a difference likely to persist under the sweeping health care legislation that Congress is considering.

The House of Representatives would permit insurers to charge older Americans twice what younger people pay. The bill that passed the Senate Finance Committee would allow premiums four times as high.

Yet the major House and Senate measures would end what many consider another long-standing, discriminatory practice: basing rates on gender.

Some wonder, are middle-age and older consumers victims of age discrimination?

Senate Finance Committee member John Kerry, D-Mass., said, “Allowing insurers to charge older Americans vastly higher premiums simply because of their age is discrimination, pure and simple.”

Sen. Ron Wyden, D-Ore., also a committee member, added: “It’s a question you’ll have senior citizens asking all over the country.”

Lawmakers say that charging older people more, though, also could be justified with data.

“As you get older, you start to consume more health care,” said House Education and Labor Committee Chairman George Miller, D-Calif.

“Age rating is a common practice in insurance underwriting,” said Sen. Jeff Bingaman, D-N.M., a member of the Senate Health and Finance committees.

So are gender differentials, he was told. Women tend to use more health care services than men, so why are those rate differences being eliminated?

“I don’t know all the answers,” Bingaman said. “You’ll have to ask someone else,” said Miller.

Senate staffers explained one reason for the difference this way: Age-based premiums can be justified by consumers’ experience, while gender-based differentials relying somewhat on potential pregnancy have the look of being blatantly discriminatory.

Experts have determined that age-based premiums can be justified at six to seven times as high as those charged the lowest risks.

America’s Health Insurance Plans, the industry trade group, would prefer a 5-to-1 ratio. In a letter last month, Karen Ignagni, AHIP president, and Scott Serota, Blue Cross and Blue Shield Association president, warned that a 4-to-1 ratio “would increase premiums for Americans in nearly every age cohort.”

Supporters of lower ratios argue that the health care overhaul legislation would require most people to buy coverage and would provide other incentives, notably government subsidies, to encourage consumers to buy policies.

The new laws should expand the risk pools, and as those pools expand, particularly with younger, healthier people, rates should stabilize for everyone.

Last year, according to Census Bureau data, 30 percent of people 19 to 24 were uninsured, compared with 12.5 percent in the 55- to 64-year-old age group. Most people over 65 rely on Medicare for coverage.

But at what point do policies become so expensive that young people won’t buy them? Conversely, at what point do premiums become so expensive that they become a major burden for older people who need care the most?

Congress is struggling to figure that out.

“The people that are getting hammered the hardest in America are the people between 55 and 64,” Wyden said. “These are folks that are essentially a decade away from Medicare, and they also are in a bad economy feeling some of the direct pain in getting laid off, because they are not in a position to get additional economic opportunities.”

But lowering the allowable ratio to 2-to-1 has other risks, said Sen. Jon Kyl, R-Ariz. “Without young people in the pool, premiums will go up for us all,” he said.

And there is a sense that older people will buy coverage, even if it’s more expensive.

Senate Democratic leaders are now trying to merge provisions of the Health and Finance committees’ bills into one, and House leaders are also working on combining three committees’ work into one bill. Each house will then consider legislation, probably next month.

The age issue is sure to come up at that time, said Wyden, and “there’s going to be some very vigorous debate.”

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