‘Age tax’ talk is political nonsense

Attack line vs. McSally ignores true care issues

Political advertisements have become parodies. They are so over-thetop, and make such outlandish claims, that it’s hard to imagine that anyone takes them seriously.

For the most part, I think political consultants, who love creating these kind of ads, are conning their donors.

Among the rubbish, there is one attack line that merits a bit of scrutiny and context. That’s the claim being made by Democrats that Martha McSally is the devil because she voted for an “age tax,” and Kyrsten Sinema is an angel because she voted against it.

Given how prevalent this attack line is, I assume that it has been poll-tested, even though its meaning isn’t clear. What in the world is an “age tax”?

The context is “Obamacare” and Republican efforts to repeal and replace it.

Obamacare sought to severely limit medical underwriting, or pricing health insurance according to actuarial risk. Insurance companies have to accept all enrollees. They cannot screen for preexisting conditions or charge more to cover them.

The only medical underwriting permitted was that insurance companies could charge up to three time more based on age.

Actuarily, however, the health-care costs of older enrollees, those age 50 to 64, are around five times more than those of younger adults. The consumption of health care goes up with age.

Far from a tax, this three times limit constituted a subsidy. As a group, older Americans weren’t going to be paying what they were consuming in health care. Younger adults would have to pay more in premiums as a result.

As a matter of social equity, this was an unjust subsidy. The class being subsidized weren’t retirees. Those 65 and older are covered by Medicare. Instead, young adults just starting out were being asked to subsidize their parents, who for the most part were in their prime income-producing years.

This was one of several factors that caused the Obamacare exchanges to begin to implode. Obamacare depended on the healthy, meaning disproportionately the young, buying policies that were bad value-propositions for them. But the penalty for not purchasing health insurance wasn’t stiff enough to get the requisite number of young, healthy adults into the pool to make the various Obamacare cross-subsidies work.

As a consequence, the Obamacare enrollees were overwhelmingly people who were heavily subsidized based on income or seriously and chronically sick. For those not in either category, of any age, Obamacare policies were just a very bad deal.

The Republican alternative — I dubbed it “Ryancare,” after House Speaker Paul Ryan, its chief architect and advocate — made a half-hearted effort to unpack some of these cross-subsidies, so that the individual health-insurance market wouldn’t be such a bad deal for so many people.

Relevant here is that it would increase permissible premium differentials based on age to five times, rather than Obamacare’s three times. But states could ratchet it back down, if they wanted.

In other words, the extent to which older adults would be subsidized by their kids would be up to the states. It wouldn’t be mandated by the federal government.

McSally voted for Ryancare. Sinema voted against it.

Hence the origins of the “age tax” attack line.

The coinage is obviously misleading. It wasn’t a “tax.” It was eliminating a premium subsidy that was created by Obamacare.

It is also brazenly disingenuous. When Obamacare was being enacted, Sinema was a state legislator. She got a White House appointment to be Obamacare’s chief tub-thumper in Arizona.

If permitting insurance companies to charge more according to age is an “age tax,” Obamacare also included an “age tax,” just a smaller one than was the default premium differential in Ryancare.

So, you could say that Sinema was for an “age tax” before she was against one.

This “age tax” attack is just a little less obvious piece of political nonsense.

The real question is what policies could the federal government enact that would make the individual health-insurance market a better deal for more people.

Don’t expect to see any ads about that.