Why Do Late Middle-Aged Women Allow Obamacare To Gouge Them?

Women joggingIn February, Professor Mark Pauly of the Wharton Business School wrote a short article proposing reforms to individual health insurance, in which he reminded us the biggest premium hike in the market for individual insurance consequent to Obamacare was among women in their 60s. The actual research was published in 2014, but I have wondered about it ever since.

Obamacare prevents insurers from charging premiums for 64-year olds that are more than three times those charged to 18-year olds. (A multiple of about five would be fairer, according to actuaries’ consensus.) Intuition tells us that should reduce premiums for older people. That intuition is wrong. Nevertheless, if politicians can convince people it is true, it makes political sense to impose the rule, because older people are much more likely to vote than younger people.

However, Obamacare also prevents insurers from charging different premiums to men and women of the same age. Pro-Obamacare politicians have a provocative slogan: “Being a woman should not be a pre-existing condition.” Because Obamacare mandates maternity benefits, women of childbearing age cost a lot more than men. So the rule hikes young men’s premiums. Because men in late middle age have “bad habits” (according to Pauly), their health care costs more than older women’s health care does. So, it hikes those women’s premiums.

Politically, this is hard to figure out. Pre-election polling indicated 69 percent of women aged 18 to 34 supported Hillary Clinton, but only 60 percent of women aged 50 to 64 did. That alone suggests Democratic (therefore pro-Obamacare) politicians would seek younger women’s support by imposing a rule that favors them but punishes older women.

But does this overwhelm voter turnout? In the 2012 election, only 44.5 percent of women aged 18 to 24 voted, while 69.5 percent of those aged 45 to 64 voted. So, in raw numbers, there are surely more late middle-aged women who vote Democrat than young women.

Perhaps this mystery is explained by the fact each (heterosexual) married household forms a single economic unit, so is indifferent to the rule. (If the household is young, the wife gets a discount and the husband a premium; whereas if the household is old it is the other way around. Nevertheless, the total premium should be unaffected by the rule.)

According to an analysis of census data by statistician Nathan Yau, only about one third of women in their mid-20s are married. By their mid-30s, this peaks at about 60 percent, which gently declines until the women start becoming widows in their late 60s (by which time they are on Medicare).

So, by virtue of marriage, a smaller share of late middle-aged women would recognize this rule as a tax on their age and sex. Too bad: It would be interesting to watch Nancy Pelosi and Hillary Clinton answer them for it.

Comments (33)

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  1. Ron Greiner says:

    Women cost more for health insurance until they are the same price, about 53-years-old, then men cost more. So yes, the Democrats hate older women.

    In life insurance it is a completely different story because life insurance discriminates and hates men in all age groups, it’s not fair and we need Federal regulation to correct this obvious wrong. Same with the hatred of auto insurance directed at young men and for some reason young women seem to be perfect little angels and cost less.

    The ratio of 1/3, they took the premium of a 64-year-old male and divided by 3 and that is the premium of young men and women now. Young people pay a lot more with Obamacare, especially children. I think because there are so many single parent families the insurance companies wanted to drive up children’s premiums to rake in the dough. When Obamacare was passed a child could get HSA qualifying insurance for $50 a month. Now it is normal to charge $500 a month to add a child to employer-based health insurance.

    With the Republican age-based tax credits of the Republicans young people make out BIGLY. I think that is OK to get them started when they are young to get them in the habit of having insurance and personal responsibility. What I’m saying is a 30-year-old couple and 2 children will have more in credit than their cost for insurance which produces a larger tax-free HSA deposit by the Feds than a 60-year-old couple. Hopefully, a 60-year-old couple will have their act together financially anyway and maybe not need so much support.

    We need people to have babies to create future tax payers if we are going to build a wall and cut off those low-rent tax payers from the south.

    • Jimbino says:

      “OK to get them started when they are young to get them in the habit of having insurance and personal responsibility.”

      RIGHT. Insurance is a religion that relieves a person from the responsibility to drive sober or to maintain his health. Since it is irrational, like all religion, it is a great idea to get kids started in it well before they get educated enough to think.

      • Allan says:

        Jimbino, I don’t understand you. I have significant assets that I wish to protect so I buy insurance. What is wrong with that?

        I buy all sorts of products to protect me from various types of risk. What is wrong with that?

        • Jimbino says:

          There’s nothing wrong with maintaining your own superstitions, whether religion or insurance. What’s wrong is roping in the non-believers as do Muslim states, as did the Roman church for centuries, and as does Obamacare.

          Ditto for our state religions of SS, Medicare and Medicaid. There is no excuse for giving tax breaks or credits for insurance that the Amish, Mennonites, Muslims, Christian Scientists, Seventh-day Adventists, Scientologists, US expatriates and tourists and I have no use for, much less for making self-insurance of one’s health compulsory.

          • Allan says:

            Jimbino, you are doing a lot of talking without any data or proof. Absent reasonable proof, what you believe seems to be faith based. That IS religion.

            I buy insurance to protect my assets.

            Time for you to answer why that is foolish. Stop with all the BS and answer intelligently. The Roman Church has nothing to do with our discussion.

            • Allan says:

              Jimbino, I answered your ridiculous reply to mine on this thread, but that didn’t include a whole bunch of other responses at Employer-based Coverage Does Not Equalize Workers’ Access to Health Care. There I corrected a lot of your misperceptions regarding Uber, Health care quality in the US and the Concord study even providing you with a link you could have found for yourself, cost differences, Cuba, some statistical items you use incorrectly, etc. I note your lack of replies there. Perhaps your religion prevented you from commenting.

              I don’t think we disagree on the use of force to make people buy private insurance.

            • Jimbino says:

              Religion is based on fear. You buy insurance because you fear losing your assets. There are people, like world travelers, circumnavigators, Everest climbers who eschew your fear-based insurance religion. It is a violation of their rights to force them to participate in SS, Medicare, Medicaid, Obamacare or other self-insurance.

              • Allan says:

                I don’t believe in forcing people to buy insurance, I purchase it voluntarily though I prefer free markets and disdain our present system.

                But, the crux of your argument is, I buy insurance because of fear. A better word would be prudence. I don’t drive at 130 mph, I wear seat belts, I don’t bungee jump with a rubber band all because of fear of injury. That is prudence. You do understand the difference between legitimate fear and faith, don’t you? Are you developing an alternate religion that is faith based where prudence is against your religious codes and is considered a sin? You certainly throw the accusation of religion around enough that one might want to believe you are empty of intelligent arguments even some that have been provided for you so you could gracefully modify what you are saying. No such luck. Your newly found religion prevents you from doing so. What makes things worse is you believe in proselytism. I guess misery loves company.

                Answer the questions both set before in an earlier thread involving healthcare quality, Cuba and a whole host of other things including statistics that you should have a better grip of. Why should’t I make my life easy with insurance of all types even though I could live without it?

      • Ron Greiner says:

        Exactly Jimbino, let’s call it what it is – brainwashing.

  2. Ron Greiner says:

    The St. Louis POST-DISPATCH today has some babe named Miranda Marquit putting a liberal spin on President Trump’s age-based tax credits saying young people lose because their tax credits are not as large as older people. But, as I have explained above that is not true. Also, I have adjusted my argument and instead of using 60-year-old people I now use 59-year-old people, live and learn.

    I got the 1st comment, as usual. I wrote:

    Ron Greiner · Ames High School, Ames, Iowa
    Miranda, you write, “But for millennials, that could actually mean paying more for coverage, thanks to a re-jiggering of how these tax credits would work.” That is not true for young people. President Trump’s age-based tax-credits will help young people more than older people so lets get the story right. A 30-year-old couple and 2 children will get $9,000 to purchase insurance and a 59-year-old couple will only get $7,000 and trust me, the older family will have a higher insurance cost. This is fine with me because any unused credit is deposited into the young family’s tax-free HSA at the bank for 1st dollar coverage for medical, vision and dental expenses. I plan on being on the Dr. Randy Tobler Show a week from Saturday in St. Louis to inform everybody about the MAGIC of Trumpcare and the Grand Opening of http://www.DonaldTrumpHSA.com I hope at the 8 AM CST
    Like · Reply · 37 mins

  3. Devon Herrick says:

    I read about the 2014 research. As Ron says (and Pauly told the Washington Post), middle-age women end up subsidizing men’s bad behavior and also subsidize younger women of childbearing age.

    • Jimbino says:

      Life insurance is really Death insurance, and Health insurance is illness insurance. Pregnancy and perinatal care are not illnesses, and there is no justification for requiring others to subsidize them. As if there were a justification for requiring others to subsidize the illness insurance of others!

      Insurance, whether in Blackjack or life, is financally foolish superstitious behavior that many of us morally and rationally oppose.

      Someone please explain why a couple vacationing in Mexico for 6 months should be required to participate in the superstition of Obamacare!

  4. Lee Benham says:

    Ron,
    A 30 year old couple will make out big. When they utilize the tax credits properly they can get affordable HSA Insurance and fund their HSA. Having the burden of paying for health insurance will allow the couple to purchase other and start saving for the future.
    The couple could get $1,000,000 of living benefit life insurance on themselves for about $60 a month.
    Coverage for Death, Critical Illness, Chronic Illness, terminal Illness and Disability.
    They would also have more funds to add to their retirement. Part of an overall good financial plan would look at utilizing the tax credits properly.

    • Ron Greiner says:

      Lee, I love you but, Are you saying that a couple who is paying $1,000 a month at their employer for health insurance should take President Trump’s age-based tax credits to pay for their insurance and get the $3,000 deposited in their tax free HSA and then buy life insurance for $120 a month that if either one gets cancer they get a check for $800,000?

      If that is what you are saying it makes sense to deal with a professional insurance agent instead of those losers at their employment. Instead of paying $1,000 a month drop your cost to $120 a month and get $800,000 if you have heart attack, stroke or cancer.

      Save $800 a month, enough to buy 2 new cars and a boat and still have better coverage that if either one gets cancer they get an $800,000 check.

      Everyone deserves to have a pro like you Lee.

      • Barry Carol says:

        Early drafts of ACA reform suggest that people who have ESI coverage or even access to it or Medicare or Medicaid will NOT be eligible for age-based tax credits. That still leaves about 40 million people, excluding illegal immigrants, who would have access to them.

        One wrinkle though is that people in their 60’s can be charged five times more for premiums than younger people under the reform draft but their tax credit would only be twice as much. That doesn’t make much sense to me.

        • Ron Greiner says:

          Barry, leaving in the family glitch makes perfect sense because we want one 30-year-old couple with 2 children to get FREE insurance with the DONALD’s age-based tax credits of $9,000 and the family next door, same age, same number of children, get NOTHING and have an uninsured family because they can’t afford the $1,213 a month their jerk employer is charging for insurance.

          If the family glitch is not in the bill you and I should fly to DC and march on the White House until they stick that gem into TrumpCare.

          You say, one wrinkle is that a 64-year-old can be charged 5 times more than a 20-year-old like in life insurance. A 64-year-old in Tampa Bay for a STM, which will take her to Medicare, is $306 per month. If you divide $306 by 5 then a 20-year-old would be $61 a month, about what it was before the nightmare of Obamacare.

          That is $5,000 deductible then 100% coverage.

          • Jimbino says:

            Life insurance is really Death insurance, and Health insurance is illness insurance. Pregnancy and perinatal care are not illnesses, and there is no justification for requiring others to subsidize them. As if there were a justification for requiring others to subsidize the illness insurance of others!

            Insurance, whether in Blackjack or life, is financally foolish superstitious behavior that many of us morally and rationally oppose.

            Someone please explain why a couple vacationing in Mexico for 6 months should be required to participate in the superstition of Obamacare!

          • Jimbino says:

            “the $1,213 a month their jerk employer is charging for insurance.”

            I’m a contract programmer who forgoes insurance of all kinds in exchange for an hourly wage premium of some 50%. To me, it’s the smart employer who pays only for work, allowing the worker to choose to buy food, entertainment, travel, insurance or education for his kids.

        • Bart I says:

          Five-to-one age banding suggests modified community rating. It sounds like they are maintaining the ACA ban on underwriting.

          It’s fine with me since the tax credit as structured doesn’t make sense otherwise. But cheap health insurance may not be as cheap as some here are expecting.

          Hopefully STM doesn’t qualify in the final bill, although that’s a minor point.

          • Ron Greiner says:

            Bart, I’m saying the 30-year-old couple and 2 children can get portable, personal and permanent Individual Medical (IM) in Iowa for $6,000 so $3,000 is deposited in their tax-free HSA.

            STM with an itty-bitty $2,500 deductible then 100% coverage is only $4,884 a year so the HSA deposit is increased to $4,116.

            YOU can HOZE most people on health insurance but I am way to smart to be fooled by you. I have been ultra-conservative saying $6,000 cost for HSA Qualifying insurance because we all know the maximum deductibles for families in 2017 and it is much higher than STM at $2,500.

            I’m all ears if you want to take a guess how much medically underwritten IM will cost if you think I’m wrong. What do you think it will cost?

        • Bart I says:

          I don’t know if a 2:1 tax credit differential is enough for 5:1 age banding, but I can’t say that for certain that it’s wrong. There’s no requirement that the ratios match. For example, a 1:1 tax credit might have been appropriate if they had kept the current 3:1 age banding.

          With even 5:1 modified community rating, the older subscribers may be getting part of their subsidy from younger people in the form reduced premiums, if the actual cost ratios are anything higher than 5:1. So their total subsidy may be more than the $4000.

          Ideally I would want the lower tax credit to roughly equal the difference between a 25-year-old’s Trumpcare premium and the minimum cost of an underwritten policy. Likewise the higher end of the tax credit should equal a 62-year-old’s Trumpcare premium minus his underwritten cost. I suspect this would result in more than a 2:1 credit range, but don’t know for sure.

          I suppose one could use STM premiums as a stand-in for the underwritten costs mentioned above.

          • Ron Greiner says:

            Bart, stop with the mumbo jumbo of the 5:1 age banding because that means nothing and it bores me to talk about nonsense. Idiot agents will take the $9,000 credit and sell this family a $500 deductible plan that will cost $10,000 a year in Iowa by saying this family only owes an additional $1,000 a year. These BOZOS only care about commission and there is none on the HSA deposit.

            Of course in Florida the premiums are higher but the credit remains the same so here the BOZOS will say you only have to pay $200 a month EXTRA or $2,400 a year to get the $500 deductible.

            This has many more moving parts than you always focusing on those goofy 5:1 age bands, we have premiums that change coast to coast and age-based tax credits that don’t. In some states like New York with their community rating the $9,000 tax credit will be $5,000 short even with HSA Qualifying deductibles.

            Jimbino can tell you that BOZO is derived from the Old Latin BOZOTROSE meaning slimy insurance agent.

  5. Lee Benham says:

    No,

    I’m saying they should pay $60 a month. About $30 a peace. Cheap cheap cheap when you are young

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  7. Bob Hertz says:

    1. Ron you suggest that the TrumpCare tax credits would be $9,000 for a young family.

    Of course we will see how this plays out in the next few weeks, but I have read about tax credits that were $2,000 for a young adult and $900 per child. That would total $5,800.

    2. As Barry notes, the smuggled draft of the Ryan plan did not allow a worker to reject employer coverage and go with the tax credit instead. And, the plan did nothing to fix the family glitch.

    Let’s see how that surfaces in the coming debates.

    3. Critical illness riders usually pay out $50,000 or similar amounts for a cancer diagnosis. The only time you get $800,000 is when your illness is terminal or you are in a nursing home with no chance to come out.

    Lee seemed to suggest that you could survive on critical illness alone. I disagree. You could fall off a roof and need $100,000 in surgeries, or get a rare blood disease not specified in the life/critical illness policy.

  8. Ron Greiner says:

    Bob, Dr. Tom Price old plan was $900 for children. The new info raises one-day-old to 29-year-old to $2,000 so add $1,100 per child or $2,200 to your $5,800 and you get $8,000.

    Notice how I use a 30-year-old couple so that increases the credit another $500 per parent or $1,000 which is in addition to $8,000 which is my $9,000.

    You might be misunderstanding what Lee is saying about living benefits because Lee knows my daughter’s MS Rx is $100,000 a year and people need health insurance. Lee sells health insurance. YOU might be reading garbage group life insurance restrictions on living benefits. I know of companies that pay a high percentage of the death benefit with an internal cancer diagnoses, like 80%. When you say terminal you are talking about garbage that Lee doesn’t touch.

    I can warn you Bob the last thing in the world you want to do is argue with Lee about life insurance because you will lose. Lee is well trained in dealing with agents that are dumb like rocks in life insurance. Lee has to know because he is responsible for their debit balance if you know what that means.

  9. Lee Benham says:

    Bob,

    you said
    3. Critical illness riders usually pay out $50,000 or similar amounts for a cancer diagnosis. The only time you get $800,000 is when your illness is terminal or you are in a nursing home with no chance to come out.

    that is not accurate. there are products out on the market that you could get that amount.

    Ron is also correct on the amounts. the latest proposals have age 0-29 getting $2000 and 30-39 getting $2500.

    You also said

    Lee seemed to suggest that you could survive on critical illness alone. I disagree. You could fall off a roof and need $100,000 in surgeries, or get a rare blood disease not specified in the life/critical illness policy

    I never said you could get by on CI alone. but there are living benefit life products that cover way more than you are aware of.

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