The effect of age-based health insurance

Years ago, in the 1990s and before, health insurance pricing was based on location, health history, sex and age. Young people paid, on average, 1/5 the amount paid by older people. Women generally paid more than men. Fewer choices were available to people with pre-existing medical conditions. Obamacare changed that in 2010. Since then, everyone in the same location pays the same rate for health insurance. Then we added government-paid subsidies so that nobody pays more than about 15% of their total income on health insurance.

Now the Republicans propose removing the income-based subsidies and going back to age-based pricing and reducing subsidies for lower-income people.  What will be the impact, net of all subsidies and tax credit adjustments?

The first-to-be-released study by a unit of Marsh & McLennan Companies predicts that insurance costs for lower-income people who pay for their own insurance would be $2,000 per year higher for an average 45 year old but more than $7,000 higher for a 62 year old.

For middle income people the impact would be positive: a savings of about $2,600 regardless of age. More detail is included in this Wall Street Journal coverage.

Winners and losers under Trumpcare

Who gains and who loses under the “World’s Greatest Healthcare Plan of 2017“? This is my checklist so far:


  • Upper income people under age 50 who will benefit more from the new tax credit
  • Healthy people who do not believe that they should be required to buy insurance because the high premium cost pays for care of the unhealthy
  • Males who believe that they should not be required to pay for medical expenses unique to women.
  • Large employers who do not want to provide employee health benefits.


  • Lower and middle-income people over age 50 who will pay much more for insurance
  • Low income people who will lose Medicaid expansion coverage
  • Modest income people, often in rural areas, making 3 times the federal poverty level
  • Individuals under treatment for mental conditions or other essential benefits required in current health plans but likely to be reduced or eliminated in future health plans
  • Employees of companies that cancel their group health coverage without any penalty
  • Women under treatment for a range of female medical issues
  • Individuals who use the free annual check-up preventative care benefits included in Obamacare

I’ve followed health care reform proposals and legislation through all of its iterations for more than 30 years. Yet I’m really struggling with this proposal. Someone is going to have to explain to me what make it the world’s greatest healthcare plan. I simply don’t see that it helps many people. It hurts far more. Wall Street Journal expands on the analysis of impact of the proposal.