Seniors are paying more for health insurance

Some lawmakers want to restrict what companies may consider when they set health insurance prices. Congress seems poised to bar firms from charging higher rates based on a person’s health history or gender. But there’s still heated debate about just how age should affect the cost of insurance.

Some lawmakers want to restrict what companies may consider when they set health insurance prices. Congress seems poised to bar firms from charging higher rates based on a person’s health history or gender. But there’s still heated debate about just how age should affect the cost of insurance.

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Older people are more likely to become ill and rack up medical expenses. That’s the explanation from health insurance companies that charge seniors more. But a key lobbying group – the AARP – says companies give too much weight to age when they calculate prices.

Hyde: If I’m 45, and let’s just say that my insurance premium is $200 a month, when I turn 50, my insurance premium may jump up to $600 a month, just because I turned 50.

Estella Hyde is president of AARP Pennsylvania.

Hyde: So in other words, you could be a 55 totally healthy individual, but the insurance company still has that option to charge you a much higher rate of premium.

When sixty-somethings buy coverage in the individual market, they can pay five or six times as much as people in their 20s. AARP wants to limit that increase.

The core idea of insurance is to share risk among enrollees. Some of the insured will be more likely to need costly care, others less likely. Industry analysts say tightly restricting the factors companies can consider will shift the cost burden to younger, lower-risk customers and their rates will go up.

Marshall: You are going away from sharing of similar risk to saying that ‘One risk should subsidize a very different risk.’

Sam Marshall leads the Insurance Federation of Pennsylvania.

Marshall: How much and what the balance is there, is precisely what we are having a national discussion on.

Under the health overhaul bill from Senate Democrats, someone 55 or older would pay at most three times more than the youngest customers. The House health plan lowers that ceiling to 2 to 1.

Lobbyist Sam Marshall says too few young people buy health insurance now, so he says it doesn’t doesn’t make sense to take steps that will make coverage even costlier for them.

Marshall: We’ve always been puzzled because the answer for bringing young people into the system is not to charge them more.

Marshall warns that pushing prices too high may cause more young customers to drop their coverage.

Swarthmore resident Tom Jenik says he learned that lesson at his last job. He worked at a retreat center and helped decide what health insurance to offer the employees. One year the personnel committee selected a new plan, with better benefits but at a higher cost. The insurer wanted the center to guarantee that a majority of employees would sign up.

Jenik, who’s 61, says most of his co-workers in their 20s opted out.

Jenik: I would argue — or try to persuade the younger people that, ‘Hey when you get older you’re gonna have to pay a lot more for things like dental care and so forth, and when you get in my situation, you’ll realize this was a good idea.

Jenik says the solution is a government-run health plan that covers everyone.

Jenik: The concept of insurance is based on community. I don’t pay more for police protection than somebody else. So we’re willing to pay for some things that serve the common good.

While Tom Jenik pines for a single-player system, Sam Marshall and others want lawmakers to rein in overall health care spending.

Marshall says the old vs. young debate does nothing to further that goal.