May 11, 2009
The rise in Aprils unemployment rate to 8.9 percent was greeted in some quarters as less bad news because the number of newly unemployed actually went down. But a closer look at the numbers reveals some grim news for baby boomers nearing retirement.

A breakdown of the Labor Department report shows the unemployment rate for older workers -- those age 55 and older -- hit an all-time record last month. According to the report, nearly 1.85 million older workers were unemployed in April, an unemployment rate in that group of 6.4 percent.

Besides losing their income, AARP says older workers are also losing health insurance coverage, at a time in their lives when they really need it.

Speaking at the Senate Finance Committees roundtable on expanding health care coverage, AARP President Jennie Chin Hansen said there are now more than 7 million Americans between the ages of 50 and 64 who lack health coverage.

Comprehensive reform to provide affordable coverage to all Americans could not be more urgent, as coverage losses are snowballing in our current economy, she said. One recent report estimated that 4 million Americans have lost coverage since the recession began, and as many as 14,000 may be losing coverage every day. This is on top of 46 million who lacked coverage in 2007.

Chinn said Americans between ages 50-64 are especially vulnerable, since they are not yet eligible for Medicare. The problem is made worse, she said, by growing unemployment.

People in this age range who lose job-based coverage often find it impossible to get affordable individual coverage because insurers consider age and pre-existing conditions when setting rates and most Americans in this age range have one if not several such conditions, Hansen said.

Industry data show that insurers reject between 17 percent and 28 percent of applicants aged 50-64. Those who can find individual coverage tend to receive less generous benefits than those with employer coverage, yet on average pay premiums that are three times higher and total out-of-pocket spending that is over twice that of those with employer coverage, she said.

Chinn said AARP is seeking a policy that would make coverage affordable for everyone by:

• Guaranteeing that all individuals and groups wishing to purchase or renew coverage can do so regardless of age or pre-existing conditions;

• Prohibit charging higher premiums because of health status or claims experience;

• Providing a choice of qualified plans through an Exchange or Connector;

• Providing subsidies based on income so coverage is affordable for everyone;

• Addressing costs system-wide through prevention and wellness, care coordination, fighting fraud, waste, and abuse, and revising incentives to reward quality rather than quantity of care; and

• Ensuring that any cost-sharing obligations do not create barriers to needed care.