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Health Insurance Costs and Coverage for 50- to 64-Year-Olds

Out-of-pocket expenses rise and access declines

En español l Adults ages 50 to 64 face rising out-of-pocket health care costs and declining access to health insurance, according to the AARP Public Policy Institute (PPI) report “Health Costs and Coverage for 50- to 64-Year-Olds.”

The PPI analysis shows that nearly one in three adults in this pre-Medicare eligibility age group lives in families that spend at least 10 percent of their after-tax income on health care.

Among the findings highlighted in the report:

  • The number of uninsured adults age 50 to 64 continues to rise, reaching 8.9 million in 2010 — 3.7 million more than in 2000.

  • Although roughly three in five uninsured Americans age 50 to 64 is employed, many are not eligible for employer health plans or else work for employers that do not offer coverage; the share of the 50-to-64 age group with employer-sponsored health insurance declined over the last decade from 71 percent to 65 percent.

  • Because most states allow health insurers to charge higher premiums based on age and health, adults in the 50-to-64 age group have difficulty securing health insurance coverage; more than one in five insurance applications from individuals age 50 to 64 is rejected.

  • For older adults who do purchase insurance plans on the individual market, the average out-of-pocket costs for premiums and health care are typically two-and-half times higher than the costs paid by people their age who have employer-sponsored coverage.

Starting in 2014, protections and benefits in the new health care law — the Affordable Care Act — will help adults age 50 to 64 access affordable health coverage, in the following ways:

  • Insurers who sell coverage in the individual market will be required to accept all applicants, including those with preexisting medical conditions.

  • While the practice of charging varying premiums based on a person’s age will continue, the variation will be limited.

  • An expansion of Medicaid, the federal health insurance program for poor individuals and families, will benefit low-income older adults who previously did not qualify for Medicaid and did not have access to or could not afford private insurance.