WASHINGTON — As congressional Republicans start repealing the Affordable Care Act, a controversial idea likely to be included in a new health plan pushes down premiums for younger people while raising them for anyone older than 46.
In a reform plan released last year, House Republicans called for raising a cap on how much more older people can be charged for individual insurance than younger people.
Insurers and experts at the conservative Heritage Foundation back the idea.
Rep. Larry Buchson, R-Ind., who sponsored a bill to change the cap, predicted Thursday that some form of it will “absolutely” be part of whatever replacement Republicans put forth for Obamacare.
The controversial health care law now limits insurance companies from charging older adults more than three times what younger people pay in premiums for individual coverage.
Critics including Buchson say they result makes premiums unaffordable for young people.
His bill, and the Republican plan, raises the limit to no more than five times as much. Congress and President-elect Donald Trump could also decide not to replace the cap, he said, after repealing it with the rest of Obamacare.
The AARP and Democrats argue against the change.
Higher premiums “would create a significant financial burden for older adults, who already pay up to three times more in premiums,” wrote Jane Sung, senior strategic adviser with AARP’s Public Policy Institute, in a recent blog post.
Inserting the lower cap into the Affordable Care Act “was a crucial issue for us,” said David Certner, AARP’s legislative policy director, in an interview.
Sen. Elizabeth Warren, D-Mass., has also blasted Republicans for the idea.
“Making it legal to massively raise insurance prices on seniors is just one of the ways their recklessness could wreck the finances — and the lives — of millions of Americans,” said Warren, a member of the Senate Special Committee on Aging, in a statement.
However, premiums under Obamacare are set to rise an average of 22 percent this year anyway, prompting Senate Majority Whip John Cornyn, R-Texas, and others to call the health care law “a failure.”
Premiums are increasing in part because fewer young people are getting insurance than expected. Their participation is needed to offset the costs to insurers of covering older, generally sicker people.
The cap is a major factor in the rising costs, Heritage Foundation health care policy analysts Edmund Haislmaier and Drew Gonshorowski wrote in a 2015 policy paper.
They called it one of the three most costly aspects of Obamacare, estimating that it raised premiums for younger people by one-third.
Buchson said, “When you place non-free-market restrictions, the market is not going to work in the way you want.”
Proposals to change the cap illustrate a key question in the debate over replacing the nation’s health care policy, said Cynthia Cox, a Henry J. Kaiser Foundation health reform expert.
That is how to drop Obamacare’s mandate to buy insurance, as Republicans want, while still attracting younger, healthier people to get coverage under its replacement?
Lowering premiums is a less-onerous way of drawing younger people into a plan than Obamacare’s current “punitive” mandate, which fines people who don’t have coverage, House Republicans argued in their plan last year.
“They’ll be able to afford the product voluntarily,” Buchson said.
A spokesman for Cornyn couldn’t clarify if the senator was speaking about the cap but pointed to another statement by the senator promising “an orderly, careful, deliberate transition” in repealing and replacing Obamacare, “to make sure that nobody gets hurt.”
Several Republican senators declined comment on the idea to raise the cap this week.
JoAnn Volk, a professor and health insurance reform expert at Georgetown University Health Policy Institute, said higher premiums for older people are concerning “because those folks are more likely to need health care.”
She said there are other ways to encourage younger people to buy insurance - like increasing subsidies to help pay for their premiums.
The AARP’s Certner said he worries a change to the cap will reverse progress under Obamacare, in which the number of uninsured people between ages 50 and 64 has fell by almost half.