Why you should care

It’s another health care arrow in Democrats’ quiver.

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For four minutes during their October 15 debate, Kyrsten Sinema, the Democratic Senate contender in Arizona, and Martha McSally, her Republican opponent, jousted on a health care issue most Americans are familiar with. Sinema accused McSally of voting to end insurance protections for people with pre-existing conditions. McSally hit back, calling the charges a “flat-out lie” and “classic fear tactics.” Then, Sinema pulled out a newer weapon.

She alleged that McSally, by voting to replace the Affordable Care Act (ACA), had also exposed Americans between the ages of 50 and 64 to higher insurance premiums than they currently need to pay. With a laugh that was half-mocking and half-nervous, McSally responded to what she called “this age tax thing they made up.” She argued that she was working to bring premiums down for everybody, including through extra tax credits for the 50–64 group.

While pre-existing conditions have been a frequent national talking point, the “age tax” — a term coined by AARP, formerly the American Association of Retired Persons — has cropped up more and more as Democrats woo seniors from Arizona to New York to Iowa to New Jersey. The Republican-backed American Health Care Act (AHCA) that failed to pass Congress in 2017 included a provision that would have allowed insurance companies to charge older customers as much as five times more than the youngest customers in the individual and small-group markets, while Obamacare limits insurers to a three-to-one ratio. The rising premiums could start as early as age 46, according to research commissioned by AARP, which calculates about 6 million people aged 50 and older who get their insurance under Obamacare would see higher premiums.

It is important for people running for office to appeal to seniors, because … they turn out to the polls.

Morgan Tucker, Arizona Protect Our Care

That makes the age tax a key health care tool Democrats are using to sway older voters — who vote in disproportionately high numbers in the midterms — by painting Republicans as indifferent to their needs. In the race for New Jersey’s 3rd Congressional District, Democrat Andy Kim has hosted telephone town halls with AARP members to discuss opponent Tom MacArthur’s support of the AHCA. House Majority PAC, a super PAC tied with Democratic Leader Nancy Pelosi, ran an ad denouncing New York Rep. John Faso for taking money from insurance interests and voting for corporate tax cuts “while imposing an age tax on seniors.”

In Iowa, Democrat House candidate Abby Finkenhauer has in an ad accused opponent Rod Blum of “letting insurance companies charge older folks higher premiums.” And in the Arizona Senate race, the debate between Sinema and McSally was only one round of their battle over both the age tax and pre-existing conditions. That’s not surprising in the state, suggests Morgan Tucker, state director of Arizona Protect Our Care. Health care is polling as the leading issue nationally, ahead of the Nov. 6 midterms. And in states with significant older populations, such as Arizonawhere more than 2.4 million people, or about 35 percent of the population, are aged 50 or olderseniors represent a ripe target for politicians.

“It is important for people running for office to appeal to seniors because we know that they turn out to the polls, time after time,” says Tucker.

While the debate is moot for people 65 and older who qualify for Medicare, AARP has a strong case for the impact on the 50–64 cohort. According to an AARP Public Policy Institute Report published in February 2017, premiums for adults aged 60 and older would have risen by an average of $3,192 per year — a 22 percent increase — while premiums for adults ages 50–59 were projected to jump by $1,524 per year, or 13 percent, under the AHCA.

But Republicans point to the rationale behind the AHCA’s proposal. A Congressional Budget Office report indicated that spending is indeed nearly five times higher among people who are 64 years old than on those who are 21 years old. With higher rates for the elderly, premiums then could have dropped for younger individuals, encouraging them to buy insurance. The ACA structure “artificially lowers premiums for seniors at the expense of younger Americans who are just starting their careers,” according to the Joint Economic Committee report authored by Rep. Pat Tiberi in April 2017. When younger, healthier Americans are drawn into the insurance pool, they stabilize high-cost individual insurance markets, the report says.

Both sides are being selective in their arguments. Democrats won’t highlight that the AHCA also included tax credit subsidies to qualifying individuals, which would have lowered costs for some seniors. And Republicans won’t underscore that while premiums for younger adults would have decreased, they would have gone down only by an average of $696 per year — less than the corresponding rise in premiums for older adults.

But whichever side you’re on, the debate reflects a shift from the pre-ACA era, when there were no limits on how much insurers could charge the elderly. Back then, the insurance industry was looking to insure the healthiest and those least likely to need care, says Dr. Leonard J. Kirschner, former president of AARP Arizona and member of the Harvard School of Public Health Leadership Council. “It wasn’t a health insurance model, it was a risk avoidance model,” he says. Insurance companies could charge a 55-year-old with a pre-existing condition 10 times higher rates than someone younger, he says. Neither the ACA nor the AHCA would allow that. McSally, who is 52 years old, made clear during the October 15 debate that returning to a pre-ACA era was not an option for her either.

To be sure, the number of older Americans who purchase insurance on the individual market — meaning not through an employer — and would be charged higher rates is relatively small. People who can participate in a group policy with a larger company won’t be affected. But for those who need to purchase their own insurance — like folks working for small companies, entrepreneurs or people who are moving between jobs — the impact would be significant, Kirschner says.

And while the AHCA didn’t pass, the age tax conversation is heating up before the midterms because the issue is still on the table. If Republicans maintain the House and the Senate, there’s already talk about repealing and replacing the ACA, Kirschner says — particularly given the absence of Sen. John McCain, who cast the decisive vote against the AHCA. The Department of Justice also faces a federal lawsuit, led by Texas and supported by 20 state attorneys general, calling provisions of the ACA unconstitutional. Among those supporters is Attorney General Mark Brnovich of Arizona, where the issue remains red-hot.

The debate over the age tax is resonating beyond just those who could be directly affected. At age 74, Phoenix resident Bill Chase considers himself healthy and is covered by Medicare but has heard the age tax arguments. He knows no amount of planning or savings can fully prepare him for unforeseen health care costs and recognizes that the security of his personal health is fleeting too: “I could have a fall, I could get hit by a car, or I could have a heart attack or a stroke.” It’s that heightened sense of vulnerability among the elderly that makes the age tax an attractive campaign issue in states with older populations for Democrats like Sinema. And one to worry about for Republicans like McSally.

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By Carly Stern

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