American Health Care Act = Unaffordable Health Care for Millions of Americans

American Health Care Act = Unaffordable Health Care for Millions of Americans

Plain and simple, the American Health Care Act would make health care unaffordable and inaccessible for millions of Americans. The facts about the devastating impacts this legislation would have on people, and older adults in particular, is disturbing. Below is a short summary from AARP of the AHCA’s impact on older Californians.

The bill reduces funding for Medicare, which will negatively affect beneficiaries.

The bill repeals a 0.9 percent payroll tax on higher-income workers, which would remove over $100 billion over ten years from the Hospital Insurance trust fund. This would hasten the insolvency of Medicare and diminish Medicare’s ability to pay for services in the future. The bill also removes nearly $25 billion in required payments from pharmaceutical companies over ten years from the Part B trust fund, which would increase premiums for people on Medicare.

  • In 2016, Medicare provided coverage for 5,271,561 Californians of all ages, or about 14 percent of the state’s population.
  • About 88 percent of Californians with Medicare are over age 65 and 12 percent are younger people with disabilities under the age of 65.

The bill unfairly penalizes older Americans with an Age Tax.

The bill discriminates against 6.1 million Americans ages 50-64 in the individual (non-group) health insurance market by allowing insurance companies to charge older people five times or more what others pay for the same coverage. At the same time, it significantly reduces tax credits now available to lower and middle-income older persons to help pay premium costs.

  • About 838,890 (or 12 percent of) Californians between the ages of 50 and 64 are enrolled in the individual market and would be impacted by the AHCA’s age tax.
  • 50- to 64-year-olds comprise 33 percent of all adults receiving premium tax credit assistance in California.

The Age Tax would significantly increase premiums.

  • A 55-year-old Californian earning $25,000 annually could see her premium increase by as much as $8,598.
  • A 64-year-old Californian earning $25,000 annually could see his premium increase by as much as $14,133.

Californians simply cannot afford to pay the higher premiums.

  • In 2015, half of all Californians ages 50-64 buying insurance in the individual market have incomes of $22,685 or less a year.

The bill removes protections for people with pre-existing health conditions.

It would allow insurance companies to once again charge higher premiums based on a person’s health condition (known as medical underwriting), significantly raising premiums and making health care unaffordable.

  • About 2,616,077 (or 37 percent of) 50-64 year olds in California have a preexisting condition.

The bill weakens protections for people with individual and employer coverage.

It allows states to waive federal standards for minimum coverage (known as Essential Health Benefits) allowing insurers to sell less comprehensive, potentially even skimpy coverage. The bill also weakens protections that ensure a person doesn’t end up with catastrophic out-of- pocket costs. This weakening includes the requirement that insurance companies must limit consumers’ annual out-of-pocket costs (such as deductibles and copays). It also includes the ban on insurance companies setting caps on how much they would cover annually, or over a person’s lifetime. These changes would affect people in the individual market and those with employer-sponsored coverage. The result would be less choice and reduced access to needed services for people with pre-existing conditions or who need medical care.

  • 838,890 (or 12 percent of) Californians ages 50-64 receive coverage through the individual market and could be affected by the bill.
  • 4,267,932 (or 59 percent of) Californians ages 50-64 receive coverage through their employer, and they too could be affected by the bill.

The bill cuts over $800 billion from Medicaid.

The bill creates a capped financing structure in the Medicaid program and cuts $839 billion – nearly 25 percent– over ten years. Both per capita cap and block grant financing would likely shift significant costs to states, state taxpayers, and families. The bill could lead to cuts in provider payments, program eligibility, services, or all of the above – ultimately harming some of our nation’s most vulnerable citizens.

  • In 2017, more than 12,360,000 Californians received health coverage and long-term services and supports (LTSS) through Medicaid.
  • In FY 2013, about 1,429,000 low-income Medicare beneficiaries in California received Medicaid.

Most people prefer to receive LTSS in their homes and communities. Nursing home care is generally more expensive than serving people in the community, but home and community- based services (HCBS) is an optional service in Medicaid. Cutting federal Medicaid spending jeopardizes access to HCBS, forcing people to rely on more expensive nursing home care.

  • California spent an average of $11,886 per Medicaid enrollee receiving HCBS compared to $33,335 per Medicaid enrollee served in a nursing facility.

Detailed source information available at: http://bit.ly/2qvESpS.

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.