ROBERT SIEGEL, HOST:
The AARP has come out against the House Republican health care plan. The group says it represents Americans 50 and older and claims 38 million members. I should acknowledge that I'm technically one of those 38 million, having received an AARP card in the mail. David Certner is the AARP's director of legislative policy. Welcome to the program.
DAVID CERTNER: Thanks for having me.
SIEGEL: Your group says that under the GOP plan, a 64-year-old who makes $15,000 a year would pay up to $8,400 more per year for health insurance than at present. How do you arrive at that number? And wouldn't that person get a refundable tax credit of up to $4,000 under the bill?
CERTNER: Yes. And actually, that calculation includes the refundable tax credit that they would be getting under the new bill. The problem really arises for two reasons. One, there's a change in what's called age rating. An age rating is how much more insurance companies are allowed to charge an older person for an insurance policy versus a younger one.
And right now currently, the law is 3-to-1. And the bill would propose changing it to 5-to-1. Then there's currently subsidies that help people who can't afford insurance buy their insurance. But those subsidies are much smaller for lower-income people and for older people.
SIEGEL: Is it your experience of the health insurance market that if insurance companies are allowed to charge older customers five times more than their younger customers, that they automatically will do that?
CERTNER: Prior to the ACA, this was allowed at the state level to basically set the insurance rules. Five-to-one was something that was often used. But sometimes it was 7-to-1. Sometimes it was 10-to-1. Sometimes there was no limit at the state level at all. Basically insurance companies would, quite frankly, prefer not to insure older people who have higher health care costs. And if they do, they want him to pay a lot more money.
SIEGEL: You see that as perhaps legally a cap, but realistically in the marketplace as what the going price is going to be?
CERTNER: Absolutely. If they are allowed to charge that much, they will charge that much.
SIEGEL: The AARP says that the Republican bill weakens Medicare. I can't say that I've read the bill. But I've at least searched it for Medicare. I don't see that explicitly in it. Where do you see that?
CERTNER: Right now, there's an additional tax on higher-income people. And that additional payroll tax goes to Medicare. That would be repealed. And there's also a fee on prescription drug companies that currently goes to Medicare. And that would be repealed. So that's a large income stream that will be taken away from Medicare.
SIEGEL: Critics of the American health care system would say it's not just prescription drugs that cost so much. All of American health care costs that much. How can there be an effective health care bill that reduces how much we pay for health care if we're not reducing what the individuals and institutions who provide health care are making?
CERTNER: Well, we clearly do spend more than the rest of the world on health care. The solution, however, is not to simply say we're going to let costs keep rising, but we're going to ask seniors and other people to just keep picking up more and more of those costs. The answer really has to be, how do we hold down costs in general across the board? And we have seen nothing in this bill that will hold down overall health care costs.
SIEGEL: As the AARP's legislative director, do you imagine yourself being in there with legislative coalitions and trying to tweak this bill one way or the other, improve that subsection and that clause? Or do you see yourself saying, legislators, throw your bodies in the path of this runaway locomotive and stop it?
CERTNER: On this particular piece of legislation, what we're trying to do first off is to really educate both people as well as people on Capitol Hill. And once we can activate our members and get in touch with their members of Congress and let Congress know what the impacts are, we hope to get some changes to this bill.
SIEGEL: Mr. Certner, thank you very much for talking with us today.
CERTNER: Thank you.
SIEGEL: David Certner is the director of legislative policy for the AARP.
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