photo: xiaming/ BY-NC-SA

By: Emily Beaver

What’s age got to do with it?

Well, when it comes to what you pay for health insurance -- age is important.

Age-rating, or using age to determine how much someone pays for health insurance, has recently been getting a lot of press. And like much of the health care debate, age-rating is turning into a battle between the older and younger generations.

What’s the fight over? Changing age-rating practices could lead to lower insurance premiums for older adults, but higher premiums for younger adults.

Usually private insurance companies charge older adults more for health insurance than younger adults. As people age, they generally have more health problems and spend more on health care services. The system seems fair—the people who use the most services pay the highest premiums.

Well, not everyone agrees. Some people and groups that advocate for older adults say age-rating isn’t fair because people can’t help aging. And age isn’t the only indicator of health, they say. An active, 52-year-old may be healthier than a 30-year-old who lives on cheese fries, Diet Coke and cigarettes.

Health care reform legislation being considered by Congress could limit how much more insurance companies can charge older Americans. The changes would set a 2:1 ratio on age-rating, which means insurance companies would only be able to charge older adults twice as much as younger ones.

Members of the insurance industry, including the president and CEO of the Blue Cross Blue Shield Association, think insurers should be able to charge older adults up to five times as much, also known as a 5:1 ratio. SHOUTAmerica, a health care reform group for young people, also advocates for a 5:1 ratio. Both the insurance industry and SHOUTAmerica basically have the same reason for wanting to push the ratio to 5:1. Lowering the ratio too much could mean insurance companies have to charge young people more to cover older adults’ health care costs. That could lead to more young people deciding to go without insurance.

Young adults are already one the largest groups of uninsured Americans. While it doesn’t seem fair to penalize anyone because of age, let’s face it—lowering the age-ratio will just cause more young adults to skip coverage.

The reason many young adults are uninsured often comes down to money—they are less likely to have jobs that offer health insurance or pay enough to allow young adults to purchase insurance from the individual insurance market. They may have just lost coverage under their parents’ insurance plans but also can’t afford expensive premiums under COBRA, a government program that allows people who have lost insurance through an employer or parent to continue their insurance coverage.

Anything that causes more young people to go uninsured isn’t good for them or for older adults. Adding more young people to the insured population will lower the cost of insurance for older people. Changing the age-rating system isn’t enough—the cost of health insurance needs to go down so more young adults can sign up. Bottom line: either the government will have to offer subsidies to make insurance available to people who can’t afford it or it has to allow private insurers to offer insurance plans to young people at lower prices -- even if those prices are lower than plans for older adults.

Previously:

• Young Doesn't Mean Invincible
• A 'Tonik' for Your Pain
• What Doc Mom and Dad MD Taught Me About Healthcare