Health Insurance Premiums for the Old in Colorado - How much extra?

Health Insurance and Old Age in Colorado

It's no secret that as you get older, health insurance companies reassess your health risks and modify their premiums accordingly. If you have group insurance, then you're likely to be less affected by this. Old people however, might not have this sort of coverage for obvious reasons, and may be forced to rely on private health insurance to fill up the gaps in the health coverage. Unfortunately, due to the high health insurance premiums for old people in Colorado, many find it unaffordable.

This problem has caused the number of old and uninsured people to rise to 36% over the last seven years. The entire system demonstrates that something is wrong. People don't have insurance at precisely the time when they need it most. People can work all their lives paying their insurance premiums faithfully without getting ill. And when the moment arrives for them to actually benefit from all the money they have paid over the years, they are deserted by a system that is supposed to help them in their time of crisis.

Image Credit: Jiří Mašek

Five Times, or Simply Double?

Most states place no limits on the extra insurance premiums that an insurance company can charge old people. Colorado for example is one such state. Old people are at the mercy of insurance companies who can squeeze them dry when they need to be protected. Due to the push for health care reforms, the debate is basically over how much extra insurance companies should be allowed to charge old people.

The catch is that if mandatory health insurance takes effect, policy makes say that this will enable insurance companies to increase their earnings anyway and since there will be such a large pool to draw from, increased old age insurance premiums are not necessary any more. Insurance companies of course disagree.

Can't have free play

Without a doubt, if insurance companies in Colorado are prevented from raising the premiums to any extent for old people, younger people will be subsidizing their increased costs. However, isn't that the very basis of insurance? Where one group subsidizes another? This happens because members of the first group don't know when they will be suddenly in the other. As far as old age goes, we're all going to become old one day. And that's why we need the government to impose a system that works without encoutering the famous Prisoner's dilemma we find in classical Game Theory.