Boston Globe Examines Massachusetts Debate Over Age-Based Pricing for Health Insurance
The Boston Globe on Sunday examined a push by patient advocates in Massachusetts to prohibit insurers from pricing their insurance plans based on age. State law requires that everyone obtain health insurance, unless purchasing coverage would exceed 12% of their income. According to the Globe, self-employed individuals and retirees ages 50 to 64 who do not qualify for an exemption are left to "choose between expensive monthly premiums that rise with age, and cheaper plans with skimpier coverage and high out-of-pocket costs for doctors and prescriptions."
Advocates say that in order to help these residents obtain affordable insurance that meets their needs, the state must outlaw age-based pricing of insurance plans, which under state law allows some elderly people to be charged as much as two times what younger people pay for the same coverage. AARP Massachusetts said it has seen an increase in complaints about age-based pricing by insurers. Deborah Banda, the group's director, said, "We have been maintaining a drumbeat on this for the last couple of years and now is the time to start pounding that drum harder." Opponents of these changes say that banning age-based pricing would have several adverse effects, such as increasing insurance rates for other age groups. Marylou Buyse, president of the Massachusetts Association of Health Plans, said, "Individuals, as they get older, use more health care services. It is a fair distribution now, considering use of the system." She added, "Young people will tell you they don't think they should have to pay anything because they don't use health insurance."
Advocates are calling on the state to include out-of-pocket costs, including deductibles and copayments, in calculating the cost of coverage. Advocates also want the maximum amount of income spent on health insurance to be reduced to 8%, though they acknowledge that this would not actually reduce the cost of care for older residents. Jonathan Gruber, a Massachusetts Institute of Technology economics professor, said that such a system would be too vague and could result in more people going without insurance because they would be exempt from the tax penalty.
Nancy Trunbull, a member of the Massachusetts Health Insurance Connector Authority board, said that the practice should be eliminated. However, the board recently postponed addressing the matter, saying they need more time to study it. Rick Lord, a board member and chair of the state's largest insurance lobbying group, said, "There's no apparent easy path here, and there have been so many other things on our plate" (Lazar, Boston Globe, 4/26).