‘Age Rating’ Is Washington-Speak for Overcharging Older Americans

Cheerful senior couple having meeting with financial advisor or insurance agent at home

If you have a hard time understanding what the wonks in Washington are talking about, welcome to the club. Beltway buzzwords are at dime a dozen on Capitol Hill, but there’s one particular term to watch out for that simply means massive health care premium hikes for older Americans.

“Age rating” is the practice of varying health insurance premiums based on age. It’s Washington-speak for overcharging older Americans by thousands of dollars for their health care.

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Currently, by law, health insurance companies are allowed to adjust premiums based on age, but by no more than a 3:1 ratio. In other words, an older person can be charged no more than three times what a younger person pays for the same type of coverage. However, there are proposals to change this 3:1 ratio to let insurance companies push even more of their costs onto hardworking older Americans.

Published reports suggest that one such regulatory proposal would allow insurance companies to charge older Americans 3.49 times as much. Why 3.49? Proponents apparently argue that since 3.49 rounds down to three, the adjustment would comply with current law and not require congressional approval. Certainly a case of being too cute by half, but don’t be fooled — it’s an attempt to boost insurance company profits at the expense of older Americans by sidestepping our legislative process.

A proposal that Congress is considering would change the age rating ratio from 3:1 to 5:1 or even higher. According to a new study from AARP’s Public Policy Institute conducted by the independent actuarial firm Milliman, the 5:1 proposal would dramatically increase premiums for older adults. On average, adults age 60 and older would see their insurance bills go up by $3,200 — making their average annual premium a whopping $17,900.

Charging older Americans five times more for the same coverage just isn’t fair. Seniors already spend one out of every six dollars on health care — they can’t afford to spend more. AARP is calling on Congress to set aside the jargon and stand up for older Americans, not insurance companies.

Call your representative in Congress at 844-617-2688 and urge them to oppose H.R. 708, the bill that would allow insurance companies to charge 50- to 64-year-olds thousands of dollars more for their health care. Remind Congress they should be standing up for their constituents, not insurance companies. You can also send a message to your representative by going to this following website.

Photo: izusek/iStock


Nancy LeaMond, chief advocacy and engagement officer and executive vice president of AARP for community, state and national affairs, leads government relations, advocacy and public education for AARP’s social change agenda. LeaMond also has responsibility for AARP’s state operation, which includes offices in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

You can follow her on Twitter @NancyLeaMond.

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