AARP is threatening to sue the Trump administration over a potential change to the Affordable Care Act that could lead to insurers charging older Americans more for coverage.
The powerful advocacy group for seniors is sounding the alarm in response to a new proposed rule by the Department of Health and Human Services that would allow insurers to widen the gap between what they charge customers of different ages.
Under the ACA, insurers are limited in the extent to which they can price based on customer age. They are not allowed to charge their oldest customers more than three times as much as their youngest ones.
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Under the Trump administration proposal, insurers would be allowed to charge 3.49 times more based on age. Some Republicans in Congress have proposed raising the limit further, allowing insurers to charge as much as five times based on age.
One of the main problems for the ACA thus far has been the challenge of getting younger, healthy people to enroll in the insurance marketplaces set up by the law. As a result, the risk profile of the enrollees has made it tough for insurers to turn a profit on the business.
A lobbyist for AARP told The Hill the organization is considering litigation, but he did not specify the legal arguments it would mount against the administration.
While the Obama administration had upped efforts to get younger people to enroll, including through youth-oriented outreach efforts and by raising the fine for going without coverage, insurers have also argued that they should be able to charge their less-healthy customers more.
While the move by Republicans to allow insurers to charge might help stabilize the insurance market, their other efforts to dismantle Obamacare goes in the opposite direction. In particular, their plan to repeal the individual mandate could further weaken the market by allowing more young people to drop their insurance.
AARP is pressuring the new president on other fronts as well. It recently launched an ad campaign pressuring President Donald Trump to uphold his campaign promise to defend Social Security and Medicare from privatization efforts.
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