Felice Freyer’s Sept. 1 article (“Tall ambitions for Obamacare in R.I. — more than insurance”) was meant “to describe . . . not critique” the vision of HealthSource RI, the health insurance exchange for Rhode Island. But we need to be critical thinkers and reporters about features of the exchanges that may lead to their demise.
One longstanding concern about private insurance is charging people more for their personal characteristics. Buying insurance from the exchanges should be just like buying products over the Internet through Amazon.com. But there is one big difference. When you go to Amazon.com to buy a television set you do not have to pay three times what somebody else pays just because you are older.
The newly published rates from HealthSource RI charge older people three times those of younger people, as the law intended. For example, if one picked the mid-level “silver” plan, the yearly cost would be $8,388 for the 64-plus individual and $2,784 for the 24-year-old.
For the older person making $45,000 and not eligible for subsidies, this amounts to 19 percent of income. For the young person, this amounts to 6 percent of income. Additionally, most of the mid-level “silver” plans offered have a deductible of $3,000 and an annual limit of $6,000. Older people are much more likely to have health conditions such as a chronic illness and a hospitalization that could quickly add up to the limit of $6,000. So, for a sick older person, the total impact of age-related pricing and a not-so-generous benefit plan could amount to over $14,000 out-of-pocket, or almost one-third of income.
An Obamacare hallmark was to eliminate most forms of insurance discrimination, including by gender, health status and pre-existing conditions. But age discrimination lives on. Why? It is not the norm around the world, under employers’ plans, in Medicare or the insurance program for Congress, and many states do not vary employee cost for insurance by age.
Peer countries that have a government-run insurance plan or offer supplemental private insurance also consider it illegal to price insurance according to age. In an ironic twist, Obamacare allows for increased insurance rates of up to 150 percent for people who smoke, but the smokers can evade this if they enroll in a wellness program. Older people cannot do anything to erase the toll of aging.
Age rating of insurance represents an American tension that plays out in many forms of public policy. Is health care and its insurance a right or a privilege? Are we a nation of individuals who “bowl alone” and take responsibility for our own risks and rewards, or are we a community of people that has shared goals and responsibilities?
Many believe that health care is a social good, like education and good infrastructure, and should be financed on the basis of the ability to pay, not on one’s use of services. If we extended the logic of use rating, shouldn’t there be extra fees for public education for families with children?
Age discrimination is the last vestige of an archaic private health-insurance system. This Achilles heel of the exchanges should go the way of the reversal of the “doughnut hole” for Medicare Part D before it. The sick or other population groups should not be singled out to balance the books for public policy.
Dwight McNeill, of Little Compton, is a visiting professor of population health and health policy at Suffolk University and author of the book “A Framework for Applying Analytics in Healthcare: What Can Be Learned from Best Practices in Retail, Banking, Politics and Sports.”
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