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Let Somebody Else Pay for it

Written by Larry Roeder, Editor
2017-02-23

If you're between the ages of 50 and 64, you could soon be in for a shock if the State Age Rating Flexibility Act of 2017 passes.

Come to think of it, if you not in that age range you could be affected by the extra cost to taxpayers in general. Some folks have declared the Act as an "age tax" and exercise in age discrimination. The recently introduce act would allow insurers to charge older Americans significantly more for health insurance.

Currently, insurers can charge older consumers up to three times what they charge other people for the same coverage. The act would allow insurers to raise that amount up to five times what they charge other people.

According to the American Association for Retired People (AARP), adults ages 60-64 who are not yet eligible for Medicare would have to pay $3,000 more a year for their health care coverage.

In most states, including Pennsylvania, the base rate for a plan is calculated using a 21-year-old policyholder as a gauge. This rate is then adjusted according to the age of the consumer. In states using the federal age and premium guidelines all insured people younger than the age of 21 are treated equally, with monthly costs coming out to a little more than 63 percent of the base rate for a 21-year-old.

Health insurance rates go up as a policyholder gets older, with the largest increases coming after age 50. This reflects the higher share of health care costs that older Americans are expected to utilize. The AARP explains that older persons in the individual insurance market have median incomes of only $20,000 and that hiking premiums is a financial burden that will eat into their retirement savings.

According to a recent Federal Reserve report, the median retirement savings for households headed by people ages 50 to 64 is only about $12,000. And seniors already spend one of every six dollars on health care. But, it won't just affect older consumers – AARP researchers found that charging older Americans five times the rate of other people would cost taxpayers an extra $6.7 billion in subsidies to help them afford coverage.

We've all read and learned about the ridiculous rise in drugs such as insulin ($17 a vial in 1997 and more than $125 today), Naloxone ($20.30 for a pre-filled syringe two years ago to $39.60 today), and a host of others. Well, when was the last time you heard of a drastic price reduction in pharmaceuticals? Allowing insurance companies to increase profits is one thing. Allowing drug companies to "go wild" with prices as demand increases doesn't bode well for the people or any hopes for affordable health care.

If Congress has time to study the State Age Rating Flexibility Act of 2017, why can't they find time to study a way to reduce health care costs for everyone? Say, perhaps, cracking down on drug companies' high prices by passing legislation to allow Medicare to negotiate with drug companies for lower drug prices.

Perhaps elected officials could take a look at reducing barriers to global price competition by allowing for the safe importation of lower-priced drugs.

Right now, it seems like the only way to get affordable health care is to have somebody else pay for it

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