Age Rating in Health Reform Will Cost Everyone More
We at OWL - The Voice of Midlife and Older Women are happy to see that the issue of age rating, which would allow for-profit health insurance companies to charge patients different premiums solely based on their age, is being highlighted in the press (both by the Huffington Post as well as USA Today ).
However, there are significant components of this issue that have not been addressed, and the pieces to this puzzle that have been left out are critical to understanding how age rating and discrimination will harm health reform efforts. While there is much to be gained through passage of current health reform proposals from the House and the Senate HELP Committee, Congress' best intentions will be overshadowed if age discrimination is written into federal law. If we are to achieve true reform, age rating must be eliminated from private health insurance.
Age rating will cost everyone more. We are naïve to think that age rating will only cost older Americans more, and that it will keep prices low for twenty-somethings. Private insurance companies focus on maximizing profits, and we should expect that if age rating is allowed, a small segment of the insured pool will pay the lowest premium, while premiums rise sharply to whatever level is allowed by Congress for everyone else. Age rating is nothing more than a loophole for the for-profit insurance industry to make up some of the money they say they will lose by eliminating gender, health status and pre-existing conditions rating. Congress should not be offering this loophole to line shareholders' pockets on the backs of older Americans.
Community rating works. The insurance lobby is trying to create fear among younger workers that they will be burdened by the cost of health care for older Americans, and playing into ageism, a sad reality in our society. The fact is that if everyone pays the same, as in true community rating, risk is fairly spread, and for those who are healthy now, at whatever age, they have the comfort of knowing that when they are sick, whether it be at 28 or 58, they will not have to worry about losing coverage because of cost or being dropped. Insurers already use community pooling for large group, employer-sponsored insurance, under which most Americans with private insurance are covered. If this would put them out of business when they add an additional 47 million customers, then surely they are already in trouble.
Age rating means more of your tax dollars will go to private insurance companies. All of the current proposals for reform rely on subsidies to ensure that health insurance is affordable based on income. A private home health care worker in her 50s isn't making any more than one in her 20s, but with an insurance premium that costs two to five times more, the federal government will have to use more taxpayer dollars to provide a bigger subsidy to the older worker. Age rating will really translate into higher costs to tax payers because the federal government will have to shell out more in subsidies to cover the higher premiums.
Congress can do the right thing. Congress has said that it's not ok to charge people different premiums because of pre-existing conditions (like having had children, or an ovarian cyst removed a few years back, or having been treated for depression), health status (like diabetes, heart disease or pregnancy), or gender. All of this is good; Congress has gotten this part right. But going that far and then giving the go-ahead on age discrimination is not just unwise, it is wrong. In the end, it has the same punitive effect as the ratings Congress is trying to get rid of - charging people more because of their history. Worse, explicitly allowing age rating is writing discrimination into federal law.
There's much to be gained in health care reform, but it's important that those gains don't come at the expense of equality, honesty, and progress. President Obama has said his Administration is committed to ending discrimination in health care. Let's see if Congress can match that standard.
Follow Natale Zimmer on Twitter: www.twitter.com/owlnational
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Age-rating is like rating for medical history or pre-existing conditions. The condition is being old or older and, like other pre-existing conditions, it does have a bearing on risk. I think Natale Zimmer has really brought this out. Keeping age-rating in (even if moderating it from 5 to 1 down to 2 to 1) while excluding other impurities in community rating (such as rating by gender or medical history) is illogical.
The purpose and principle of insurance are to spread the risk. Creating universal coverage acknowledges we are all in this together. Research has established that the health of each depends on the health of all and the health of all depends on the health of each. This is not just a platitude. We cannot isolate ourselves from the consequences of others' behaviors and conditions. Others pay now for the uninsured and underinsured in so many ways. Just two examples are paying through financing uncompensated care at hospitals and paying through losses to the economy when people (more often the insured than the uninsured) go bankrupt due to medical bills. Universal coverage combined with community rating makes explicit that we share the risk of needing health care.
The whole age rating discussion reflects the inadequacy of the the current health care reform proposals. Age rating protects the insurance companies by allowing discrimination on the basis of age instead of health status as at present. (Moreover, age rating is disguised discrimination against women, since women represent a larger proportion of the older the age groups.)
The entire concept of "insurance" is inappropriate for health care. Since we should regard the treatment of the sick and the protection of the public health as a social obligation, health care should be financed in the same way as defense, prisons, and other protections, by general taxation. We don't ask old people to pay more towards the armed forces, just because they may be less able to defend themselves. We don't ask young people to pay more because they are more likely to be incarcerated.
None of the legislative proposals will produce a fair system since their goal is not to protect our people, but to protect the insurance and drug companies. The current proposals will aggravate an already fragmented payment system which will be unable and uninterested in containing costs (except by limiting access to care, using high deductibles, coinsurance, and copays.).
Not even being considered is the system that has worked in most other developed countries to enable their populations to attain better health and longer lives than the benighted people of the U.S.
Single payer works everywhere else. What's the matter with us?
Natalie Zimmer, and OWL, have spotlighted a concern that is whispered about among older women, but not much mentioned out loud for fear it might come true. Thank you for bringing attention to this scary possibility.
A lot of people, who one would think would be more informed, don't know how much older women have to pay out-of-pocket already without the onus of having to pay more for age-rated insurance. We already pay a premium for Medicare Part B, and Part D, if we choose to use it. The older people that I know are reluctant to request help for over-the-counter medications, or for health-care treatments that Medicare does not pay for. And most of the older women that I know are, and have to be, very frugal with their very modest incomes. Very few retired women, especially rural women, have pensions and huge IRAs; most live on minimum social security and small savings accounts. And few have ever had an employer provided health care insurance plan.
Older women and their partiular problems and issues are often invisible to the greater society. And those who live in the isolation of very rural areas are even more invisible. By discussing this age-rating concept and other issues, Ms Zimmer has given us a voice. Thank you.
Brava, Natale, for speaking truth to power! Nobody whose health coverage comes from the federal, state, or local governments or from a large corporation or through a major medical plan is subject to age rating. It's just small businesspeople and consultants and those out of work who are unprotected from this blatant discrimination. They fall into the clutches of bottom-line insurance bureaucrats who are salivating at the possibility of gauging the middle-aged and older portions of those 42 million uninsured Americans Obama's trying to cover. This is an outrage and I'm so proud of OWL for bringing such ageist and predatory practices to the Nation's attention.
Age rating is yet another give-away to the insurance industry that is doing not much more than coming between the patient and their physician. It is apparent that many, if not most, of our policy makers are more interested in the well-being of the insurance industry than those they are supposed to represent.
For profit health care makes us all sick.
I never thought of this aspect of the health issue. What scares me is that for all the well-reasoned arguments that I read here or on the NYT op-ed pages there are just as many people jumping up and down screaming about gov't sanctioned murder on behalf of big business. I really wonder if we as a nation are even capable of doing the right thing.
If you age rate you are making healthy older people pay for sick older people and young healthy people pay for sick younger people. The issue is who are you going to spread the risk among to pay for the sick at any age. Better to spread it among all people, not break the groups down by age or gender or race or other categories that people can't control. If we are worried (which we should be) about health insurance not being affordable for any group, we should have people with more money pay more, not people who are older.
Dont stop at age. If purchase is mandatory for all citizens and there's no 'public auction', the insurance industry will have to create a means of insuring high-risk individuals. To do this, the industry typically creates a shared risk pool that every insurer has to buy into.
What this means is that insurance companies will lose the ability to screen and exclude undesirable policies, and that in turn means that a lot of actuarial science stops paying off. It does no good learning to detect high risk joe if you're going to have to insure Joe regardless. At this point, all an actuary and the record-keeping and form-filling that it takes to supply the actuaries with data can do is cost money.
If you're running a comprehensive system, you don't need to know all that info, so you don't have to pay to acquire it. It's expensive info to acquire and not worth having.
As posted by "WhatWould
I think you're missing some major points:
1. Discrimination is wrong, and shouldn't be written into law.
4. Auto insurance is a choice - you don't have to drive. But Congress is going to mandate everyone purchase coverage. At that point, either everyone should pay according to their risk, like now, or we all pay the same.
Additionally, women use more health care due to several factors one being childbearing. Therefore, women have had to pay more in premiums. We've decided as a nation that this isn't fair. (yay nation) The same logic applies - we all get older - we can't control getting older. We can however, choose to be healthier. Should we say to people, well - yes, you have cancer - too bad for you - so yes, you should pay more in premiums. Community rating creates a large pool that each of us should and could pay into that spreads the risk so that when you need care you get it regardless of gender, age or health status.
Age rating is fine. It is perfectly legal and is used in auto insurance. If you are 18 (and likely to get in an accident, statistically) you pay more. If you are male and 18 you pay even more. This is justified because 18 year old males are, by and large, stupid drivers. When I was 18 I totaled a car and had 3 tickets, its only worse today with all the texting the very young do behind the wheel.
Now I am 26 and pay a much lower rate, and not coincidentally I have no accidents or tickets within the last 3 years at all. Using age allowed them to assess the relative risk of me doing something stupid in a car pretty accurately.
There should be a similar system for age in health care, but obviously reversed. An 18 year old is very unlikely to develop serious (and expensive) medical conditions and should pay less (offset in part by paying more for other types of insurance). The older person, with higher relative risk should pay more, though they will pay less for other types of insurance where age is an asset (such as auto insurance). This again accurately reflects the relative risk and should be allowed. I should't pay more for pooled community auto insurance to subsidize 18 year olds that drive like idiots, and I shouldn't have to pay more by the same token for 50 year olds who haven't taken care of themselves.
The whole point of reform is to a) spread the risk more widely, and b) eliminate the price differentials and other industry practices that put people into bankruptcy when they get sick. If they make it universal, everybody is in the same risk pool and there is no difference in the average cost of care so the price can be the same for everybody i.e., lower.
Car insurance is fundamentally different, because it is first and foremost about liability to others - if you hurt someone or damage their property, the insurance company indemnifies you where that person is concerned. Reimbursement for damage to your own property or injury to yourself are extras that the insurance company sells because they can make money on it; that doesn't change the fact that the first reason to have it is to protect you from going bankrupt because you accidentally rearended somebody on the freeway.
And who the he// are you to decide whether a 50-year-old who gets sick has or has not taken care of him or herself. People get sick for all kinds of reasons besides neglect, you know. And furthermore, there are huge numbers of people who do not currently have the means to see to all kinds of health conditions that will only get worse as they get older. Making coverage available to everyone should mop up that little problem but it will take about a half a generation to see the full results.
Wait until everyone gets a load of the drug costs.
"Congress should not be offering this loophole to line shareholders' pockets on the backs of older Americans.
That and more will be on the backs of us all. The deal is already set. The Repubs and Dems are only arguing over regulations. Republicans want none, some Dems (just SOME) want alot. The Repubs would never let their constituents know this, so they have the smoke-screen, non-sense protests pre-occupying them.
As for progressives and other Dem constituen
We already have age discrimination. I'm younger than 65, and can't take advantage of the single payer Medicare program my tax dollars are paying for.
That's discrimination.
I agree entirely, this is legalized theft by the very old that is primarily possible because the elderly vote far more often then the younger generations do. Medicare should be for everyone, or for noone, the idea of those who have the most use for medical care (the 25 year old who loses six decades of lifespan if they cannot get treatment for cancer) are denied it in favor of those who would die within a decade regardless of health innovations (the 85 year old with multiple failing organs).
If anyone was asked without the knowledge of their own age who we should cover first, a dozen hard working young people or one very infirm 90 year old who needs round the clock care due to multiple organ failure who do you think they would pick?
first for those who complain about cost, statistically, those in middle age make FAR more then their 20 something counterparts so the increase in cost will be offset by wage increases in many cases. A community system would be yet another effective tax levied on the young that only benefits the very old (as if medicare and social security are not enough). Making the cost of quality care out of reach for the 20 something set so that the 50-60 something set can have coverage that doesn't adequately reflect their risk is just wrong.
You would have a great argument except for the fact that the intention is not to make healthcare more affordable to seniors at the expense of making it UNAFFORDABLE to young people ("Making the cost of quality care out of reach for the 20 something set so that the 50-60 something set can have coverage").
When I was in my 20's all I could manage was a $5000 major medical policy. A complete joke. You speak as though 20 somethings now can easily afford adequate coverage and Obama wants to take that away. The plan is to make it more affordable to EVERYONE.
ANd this comment:"If anyone was asked without the knowledge of their own age who we should cover first, a dozen hard working young people or one very infirm 90 year old who needs round the clock care due to multiple organ failure who do you think they would pick?"
SOunds like you're advocating some form of "death panel" somewhere in our society even as the republicans falsely claim that is what the dems want in the bill. It's about healthcare for ALL, my friend. Affordable healthcare for all.
Not everyone in middle age makes more than people in their 20's, and if you lose your job in the middle of your life, guess what, it's a whole lot harder to get another one due to age discrimination. And paying into the system while in their 20's makes it possible to keep the price down when they're in their 60's. A universal system would require much less from each individual than the current astronomical costs of premiums and deductibles, what is so bad about that?
Discrimination of ANY kind, should not be allowed, and has NO place in this bill.
Younger drivers pay more than older drivers for auto insurance. Older people pay more than younger people pay for health insurance. Why? It's simply because the claim experience is much higher for one group than another. Would anyone suggest that middle aged drivers with no claims pay the same premium as a 17 year old with numerous claims? Would anyone suggest that we eliminate the progressive tax system because someone pays a higher discriminatory rate? Whether it's a private or public health care program, you have to balance the money going out with the premiums paid.
If all insurance rates were the same, you would get almost no participation from the young. Most would prefer to take their chances. As it is, the percentage of young people insured with their own health policies is significantly lower because of the cost. If you prefer to raise their burden, many more will choose to opt out. Therefore you would need a mandate that all people must purchase health insurance to avoid having only the elderly and ill participating.
The only remedy for rising health premiums is a public option. But that public option must be fiscally sound. Suggesting that all age groups pay the same premiums is not a solution.
I think you're missing some major points:
1. Discrimination is wrong, and shouldn't be written into law.
2. Age Rating is just letting the insurance companies gouge older people in the individual market. They already use community rating for businesses, and since they can afford $1.4 million a day on lobbying, it doesn't seem like it's a practice that will put them out of business..
3. With age rating in and all other rate bands out (health status, pre-existing conditions, gender...) it means a fit 56 year old in perfect health will pay up to 5 times more than an obese type II diabetic 28 year old. Sound fair?
4. Auto insurance is a choice - you don't have to drive. But Congress is going to mandate everyone purchase coverage. At that point, either everyone should pay according to their risk, like now, or we all pay the same.
But I agree with you we need a public option. We'll never control costs overall without it.
With due respect to your position.
1. Discrimination is wrong. But asking people to pay based upon actuarial factors is not discrimination. This from the DOL: Discrimination is unfair, but not all unfair treatment is discriminatory. Something more than simple unfairness (i.e., unfairness not based on a prohibited factor) is necessary to constitute illegal discrimination.
2. Age rating is an attempt to charge premiums based upon expected losses. Now I agree that the health insurance companies are gouging the public. But it is because they pay out only about 57% of premiums in claims.
3. I'm not certain how the public plan will decide to charge premiums. But I am sure that if all people end up paying the same premium regardless of age, the young people will choose to non subscribe. And that will create a major problem for the program.
4. In most states, auto insurance is not a choice. If you drive a car, insurance is mandated by both the state and the lienholder. And currently Congress has not mandated health insurance for all. Personally, I am opposed to a mandate, but I would accept it as part of a compromise.
Like you, I agree that a public option is essential to reform. Without it, the system will implode with bloated costs and eat up our country's economy.
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