Age Tax a One-Two Punch for Older Americans

The health care bill being debated in Congress would hit older Americans with a two-part “age tax” that would dramatically increase what they pay for coverage, according to a new report from AARP’s Public Policy Institute (PPI).

The age tax would hit in two ways: First, the American Health Care Act (AHCA) would allow health insurance companies to charge older Americans five times what they charge others for the same coverage. Current law prevents insurance companies from charging more than three times more.

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Allowing insurance companies to charge people 50 and over five times more than they charge other people would raise premiums for consumers over 60 by more than $3,000.                                                                                      

The second part of the age tax would boost premiums even further. It results from replacing the current law’s premium tax credits with a flat tax credit. That means that as people get older, they see a much larger reduction in their tax credits designed to help pay for health insurance.

Together, the two components of the age tax would drive up premiums for older Americans substantially. For a 64-year-old earning $15,000 a year, premiums would rise by $8,400.

A recent analysis from the nonpartisan Congressional Budget Office paints an even more dire picture for older Americans. The CBO found a 64-year-old earning $26,500 would see premiums increase by an eye-popping $12,900 in 2026.

The CBO concluded, “The legislation would increase the number of uninsured broadly, [and] the increase would be disproportionately larger among older people with lower income; in particular, people between 50 and 64 years old.”