Feb 7, 2017

The legal problem with charging seniors more for health insurance

CDC / Creative Commons

One of the possible short-term Obamacare fixes in the Trump administration's "market stabilization" rule, according to a few media reports, would allow health insurers to charge older people 3.49 times more for their premiums than younger people.

Nick Bagley, a law professor at the University of Michigan and author at the Incidental Economist blog, does not think the proposal holds much weight legally. Obamacare, he writes, is crystal clear on this issue: It restricts that age ratio to 3-to-1. But some within Trump's agency believe that because 3.49 "rounds down" to three, it will still comply with the statute. Republicans and the industry argue expanding the ratio will allow insurers to price their products better and make them more attractive for younger people, but it would inevitably raise premiums for older Americans.

The money quote: "If a lawsuit is brought, there's a trivial chance — it rounds to zero — that HHS will win."

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