The Association of U S West Retirees



Health insurers see lucrative market with early retirees
Roughly 7 million Americans between the ages of 50 and 64 are uninsured. Federal Medicare kicks in at age 65.
By Tom Murphy, The Associated Press
Denver Post
Sunday, November 4, 2007

INDIANAPOLIS Health insurers trying to boost individual policy sales are making a new push into an older market -- the roughly 7 million uninsured Americans between the ages of 50 and 64.

Financially stable baby boomers who either retire young or need coverage after a corporate downsizing are driving this push, experts say.  Insurers also want to build ties to customers who may need Medicare-related insurance after they turn 65.

Humana Inc. launched a new individual policy last spring that targets early retirees.  WellPoint Inc., the nation's largest health insurer, is testing a similar plan.  Aetna Inc. announced in April a seven-year agreement with AARP to sell individual insurance to its members between the ages of 50 and 64.

But this coverage push draws skepticism from consumer watchdogs who say insurers have a history of avoiding this age range and the expensive claims for illnesses that often hit that group.

"That is a market that needs to be served, partly because traditionally WellPoint won't serve them," said Jamie Court of the California-based Foundation for Taxpayer and Consumer Rights.

That is not the case, according to Jude Thompson, WellPoint's president of individual markets.

"We don't have tougher underwriting or a different set of standards for 50- to 64-year-olds than anyone else," he said.

Federal Medicare coverage starts at age 65.  Insurers find the age group sitting in front of that marker attractive for many reasons.

One is sheer volume.  The Census Bureau estimates the baby boomer population, ages 43 to 61, at 78 million people.  That's about a quarter of the U.S. population.

The market "represents a big chunk of potential," said Steve DeRaleau, chief operating officer of HumanaOne, Humana's individual-policy business.

Additionally, employers are dropping retiree benefits.  The percentage of large companies that offer health benefits to employees and retirees has dropped from 66 percent in 1988 to 33 percent this year, according to a survey from the Kaiser Family Foundation.