Age-based pricing for Dealth insurance has some consumers cutting back on coverage

Sue Rummel was determined to keep the custom drapery business she built over two decades afloat in a bum economy, so when her health insurance premiums jumped 16 percent last year, she scaled back her coverage and used the savings to balance her books.

Graphic Boomers pay price by economizing
Then she tore cartilage in her right knee, and her downsized health safety net failed to protect her pocketbook.
Surgery left her with $2,400 in unpaid bills.
"It's Russian roulette," Rummel said.
"You pay the lower premium and hope you don't need healthcare."
Like the 62-year-old self-employed Danvers seamstress, thousands of other baby boomers are finding themselves in this bind - having to choose between expensive monthly premiums that rise with age, and cheaper plans with skimpier coverage and high out-of-pocket costs for doctors and prescriptions.
Consumer advocates had hoped that regulators overseeing the state's pioneering health insurance overhaul would start to address this issue, by making it easier for self-employed people and retirees who are 50 to 64 to be exempted from a stiff tax penalty if they can't afford insurance. Connector Authority board members recently postponed tackling the issue, however, saying they needed to further study it.
"There's no apparent easy path here, and there have been so many other things on our plate," Rick Lord, a board member and chief executive of the state's largest business lobbying group, said in an interview.
Meanwhile, AARP Massachusetts, which has more than 800,000 members 50 and over, is hearing a growing number of complaints about age-based pricing in insurance, said its director, Deborah Banda.
"We have been maintaining a drumbeat on this for the last couple of years," she said, "and now is the time to start pounding that drum harder."
State law allows insurers to charge older people up to twice as much as younger people for the same coverage. In other states, the disparities can be even greater. One result is that more older people choose less comprehensive plans. Data from the Commonwealth Choice program, which offers state-approved private insurance, show that as enrollees grow older, more choose cheaper and less comprehensive coverage. Rummel, for example, would have had to pay $567 a month for comprehensive coverage, but opted for a more basic plan that cost $376.
Nearly everyone in Massachusetts is required to have health insurance or face a tax penalty, but regulators can waive the penalty if a person's monthly premium is deemed unaffordable.
The AARP and a coalition of other consumer groups want state regulators to count out-of-pocket costs, such as deductibles and copayments, in addition to premiums when determining whether insurance is affordable. And they want the maximum percentage of a resident's income spent on healthcare costs to be lowered to 8 percent. Some older residents, such as Rummel, now spend more than 12 percent of their income. These changes would allow more older people to avoid the penalty. But they would do nothing to make insurance more affordable, so AARP also wants lawmakers to tackle the larger issue of age-based pricing.