A Healthy Blog

Massachusetts health care — wonky, with a healthy dose of reality

Should Insurers Be Allowed To Discriminate Based On Age?

Should Insurers Be Allowed To Discriminate Based On Age?

March 27, 2009

Yesterday's news was that insurers are ‘offering’ to phase out their practice of charging higher premiums to sick people if national health reform includes a mandate for coverage. Skeptics denigrated the concession, particularly because it did not apply to small group coverage, claiming the key point of the insurers is their drive to prevent a public option competing with private plans.

In Massachusetts, these practices were eliminated in the early and mid-90’s. But in yesterday’s Commonhealth Blog, Nancy Turnbull reminds us that there is one area in Massachusetts where insurers are still allowed to discriminate - age rating. She thinks age rating's time may have passed:

“I’d been meaning to suggest that Massachusetts should think about abandoning the major discriminatory rating practice we do still allow, and that’s age rating. Our insurance laws permit health plans to charge older people as much as twice the premium rate as younger people for the same product. The classic argument in favor of age-rating has been that it’s necessary to have lower rates for younger people in order to convince them to purchase insurance. The ability of health plans to age-rate also creates a troubling inequity in the state’s affordability schedule at the highest income levels, where the schedule requires people to purchase insurance regardless of the cost...

But if we look back at the history of many insurance practices that were once common in the insurance market in Massachusetts but have been abolished—like rating based on race or gender, or not providing coverage for maternity care and mental health—we find the same initial opposition. We’ve done many innovative things under the state’s health reform law—let’s talk about whether eliminating age rating should be another one.”

We think this is an important issue to be raised now. ACT!! has long advocated for greater affordability protections for older people who are hard hit by the mandate. There's no magic about the current 2:1 rate band. New York has long required full community rating - no age discrimination allowed - for small groups. This should be on the health policy agenda for the near future.
Georgia J. Maheras