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Health Age Band May Narrow

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Members of the Senate Finance Committee might move to further limit the difference between the rates health insurers could charge the oldest insureds and the youngest if health proposals now under consideration are implemented.

Sen. John Kerry, D-Mass., introduced an “age band” amendment Friday, as the Finance Committee continued “marking up,” or revising, the “chairman’s mark” of the America’s Healthy Future Act bill.

That bill and a health bill developed by the Senate Health, Education, Labor and Pensions Committee are the 2 major Senate health reform bills still in play.

The Finance Committee already has narrowed the proposed AHFA bill age band — the ratio between the rates charged the oldest and youngest insureds — to 4 to 1 this week, from the ratio of 5 to 1 recommended when Finance Committee Chairman Max Baucus, D-Mont., unveiled a summary version of the bill.

Kerry noted that the HELP bill would set the age band at 2 to 1.

“True health reform ought to end the discrimination based on age and health once and for all,” Kerry said at the markup. He suggested that reinsurance provisions and other risk adjustment provisions in the current version of the AHFA bill should eliminate the need for big difference between the rates older and younger insureds pay.

Yvette, Fontenot, a committee staffer, noted that the majority of states have no limits on age bands today, and lawmakers talked about states in which the premiums for the oldest insureds are 28 times higher than the premiums the youngest insureds pay.

Sen. Charles Grassley, R-Iowa, the highest ranking Republican on the Finance Committee, said narrowing the age band to 2 to 1 could backfire, by increasing health coverage prices for the youngest insureds.

Committee analysts have estimated narrowing the age band to 4 to 1, from 5 to 1, would increase the premiums the youngest insureds pay by about $150 per year, and narrowing the age band to 2 to 1 might increase the younger insureds’ premiums about $300 per year, Fontenot said.

But Grassley said one actuarial firm has estimated narrowing the age band to 2 to 1 could increase rates for the youngest insureds by 50%.

Kerry ended up withdrawing the amendment and suggesting the age band issue should be addresses when the Senate irons out differences between the AHFA bill and the HELP health bill.

Baucus suggested the Finance Committee could wrap up consideration of the age band amendment next week, when the committee continues marking up the AHFA bill.

Kerry noted that the Congressional Budget Office said his amendment would have no effect on the federal budget deficit.

“I’d like to talk to CBO about that,” Baucus said.


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