Health Insurance Age Rating = Corporate Welfare

Posted December 21st, 2009 by Natale Zimmer

Age discrimination in the form of age rating, the practice of allowing private insurers to charge people higher premiums solely based on age, is wrong. And Congress is buying the false argument from the insurance companies that without age rating, insurance will be too expensive for younger people.

But that’s not really why the insurers are lobbying for discrimination. As usual, it’s about lining their pockets.

Some claim to be worried that without age rating, premiums will be too high for younger people, even though they support ending discrimination. True, eliminating age rating would equalize premiums, making them a little higher for younger people, and a lot lower for older folks (see this report from the Urban Institute). Unfortunately, among the uninsured, those 50-64 have an average annual income of just $30,000. Younger uninsured Americans make a little less: $28,500. If a slightly higher premium is too expensive for someone earning $28,500, it seems that a premium three times higher would be far too expensive for someone making only a little bit more.

So what will we do? Those older folks who are charged three times more are going to need some help paying those high premiums. Want to guess how they will manage? Federal subsidies. That’s right. Tax dollars. Your tax dollars. Going straight into the pockets of the insurance companies to cover the three times higher premiums.

Once again, well-meaning Democrats have been outsmarted by the insurance lobbyists. And now on top of your own insurance premiums, you’re going to help pay for the premiums of those folks who get charged three times more. First the bank bailout, and now corporate welfare for private health insurance companies, all while writing discrimination into law.

Is this the change we were looking for?

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