Groups Take Opposing Stances on Health Plans’ Age Rating Practice
America's Health Insurance Plans President and CEO Karen Ignagni on Thursday said that the group is lobbying lawmakers to support a 5-1 age rating ratio, a practice that is pitting the insurance industry against AARP, CQ HealthBeat reports.
Age rating allows insurers to charge higher premiums for older enrollees buying insurance in the individual market.
At issue is how much health reform legislation should restrict the practice, with AARP advocating rules that would prohibit insurers from charging seniors more than double the cost of premiums for younger enrollees and AHIP supporting weaker regulations.
According to AARP spokesperson Jim Dau, the group last week "endorsed the House's health care bill (HR 3962) in part because it takes a major step toward ending this practice."
The House legislation included a 2-1 ratio, meaning that insurers could charge seniors no more than twice what they charge younger enrollees for premiums.
"The industry's continued embrace of age rating is further proof that private insurance companies only pose as champions of older Americans when it is convenient to their bottom line," Dau said, adding that AARP supports abolishing age rating "because fairness is a fundamental American value, and arbitrary discrimination in any form runs counter to who we are."
AHIP defends the practice, saying that a higher ratio keeps premiums for younger U.S. residents -- who tend to generate less health care costs -- lower, making them more likely to purchase insurance coverage and in turn lowering costs for everyone.
The House bill includes a 2-1 ratio and the Senate Finance Committee bill (S 1796) opted for a 4-1 ratio.
In addition to lobbying for a 5-1 ratio, AHIP is supporting a possible external subsidy to help seniors afford coverage. In some states, premiums for seniors are seven times higher than those for younger enrollees (Norman, CQ HealthBeat, 11/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.