Right now the U.S. House of Representatives is debating HR 708, the State Age Rating Flexibility Act of 2017. Under the Affordable Care Act, insurance companies were only allowed to charge older customers a maximum of three times the premiums charged to younger customers. The State Age Rating Flexibility Act would allow insurers to charge older customers 5 times the cheapest/youngest rate.
So I’m already scratching my head: where did the ACA geniuses come up with a nice round figure of “3” as a multiplier for the max rate? Rep. Larry Bucshon, MD (R-IN), a cardio-thoracic surgeon, is the sponsor of the bill which would allow insurance companies to increase the age rating ratio from 3:1 to 5:1. “Dr. Bucshon says the market shows that care for older adults costs 4.8 times that of younger, healthier patients.”
A proponent of the bill says that ending the 3-to-1 limit “would remove the disincentive for young people to enter the market and would better reflect the reality of what insurance costs in the market.” This theory is apparently based on younger enrollees abusing the spirit of Special Enrollment periods (SEP) to buy short term, more expensive policies (which they subsequently dropped) rather than more affordable and therefore more sustainable policies. Given that we are talking about a demographic that largely doesn’t give a generic rodent’s intercourse about insurance coverage that in many cases is overly-subsidized and/or provided by their parents, the idea that charging older folks more will bring the youngsters rushing in is not credible.
The bill would also shorten the enrollment grace period for ACA exchange plans to bring them in line with individual market plans. I’m all for being fair to the insurance companies, so long as we can figure out how to get back the crony-corporatist hoard the ACA helped them steal from policy holders and taxpayers in the first place.
I don’t know if the Republicans pushing this bill really believe in it, are being bought off by Big Insurance lobbyists, or are playing for a PR angle. I do know that the Dems have tiresomely, predictably begun to cry that this will make coverage less affordable for older folks not yet Medicare-eligible, and worrying that this could price more people out of the market (hilarious, given that it was the Democrats who held us down and injected us all with this price-gouging malignancy to begin with, while Big Insurance handed them the hypos).
AARP is carping about an “age tax” as a consequence of this bill. AARP Senior Vice President Joyce Rogers says it “would allow insurers to charge older Americans significantly more for health insurance,” and she’s right. “This legislation has a simple explanation — it would be an age tax — charging older Americans not yet eligible for Medicare a penalty of five times what others must pay for health insurance.”
“The term ‘age rating’ is Washington-speak for overcharging older Americans by thousands of dollars for their health care,” said AARP Executive Vice President Nancy LeaMond. Whoa, hold up – how do we define “overcharging?” The insurance companies will absolutely use this bill as cover to cheat and steal even more than they already have, no question. But how does LeMond know what constitutes overcharging? When has the AARP ever taken any responsibility for driving UP the cost of health care by their hard line year after year against any rational Medicare reform? That greatest of all black holes created the inflationary spiral that went a long way toward making health insurance unaffordable for so many. When you think about it, Medicare and its AARP cheerleaders took a great hand in creating ObamaCare. And yes, citizens older than 50 but too young yet to be one of LBJ’s Children – including yours truly – are the ones whose premiums may go up quite a chunk.
More LeMond: “Charging older Americans five times more for the same coverage just isn’t fair and AARP will fight to hold our elected officials accountable for taxing older American families with a burden they don’t deserve. Seniors already spend one out of every six dollars on healthcare—they can’t afford to spend more.” (But its seniors who are sicker and more expensive! Why shouldn’t they or their families expect to pay more?)
“A typical senior without insurance in the individual market has a median income of only $20,000. Asking moderate and middle income older Americans to pay over $3,000 more out of pocket for insurance will put a major squeeze on other necessities. And, this group is already dealing with added expenses from the high prices of prescription drugs.” (Hey, what about the Medicare Part D vote-buy that Bush ’43 and the shuffleboard set rammed on the rest of us??)
So to sum up: the GOP is passing an incomprehensible fixit bill for a program they say they want to repeal, which will encourage even worse abuses by an industry that won the big-money round the last time they played Let’s Make a Deal in D.C. The Democrats who screwed all of this up and don’t want any of it fixed, want to protect the young and the pre-seniors with a program that is collapsing…exactly…as…designed. And one of Big Government’s most reliable, bi-partisan voting blocs, the AARP legions, will fight every reform while hollering about a fairness they dare not define. This is one pig’s breakfast of a mess with no good end in sight.