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.