AARP Urges Senate to Start from Scratch on Health Care Bill
Tens of thousands of Alaskans will be adversely affected if the American Health Care Act (AHCA) passes
WASHINGTON, DC and ANCHORAGE, AK— On May 15, 2017 AARP sent a letter to every member of the U.S. Senate, including Sen. Lisa Murkowski and Sen. Dan Sullivan urging them to start from scratch on the health care legislation passed by the U.S. House of Representatives on May 4. The letter came after AARP also informed its members how each House member voted on the bill. Rep. Don Young (R-AK) voted in favor of the AHCA.
“The deeply flawed House bill would add an Age Tax, increasing health care costs by thousands of dollars each year we grow older, and put millions of American families at risk of finding health care unaffordable or unavailable,” said AARP Executive Vice President Nancy LeaMond. She concluded with, “AARP urges you to ‘start from scratch’ and craft health care legislation that ensures robust insurance market protections, controls costs, improves quality, and provides affordable coverage to all Americans.”
AARP’s letter notes that big insurance companies could charge older Americans five times – or more – for coverage, and charge many Americans more than their take home pay, noting, “The median annual income for 50-64 year old Americans is less than $25,000… [The House health bill] would remove pre-existing condition protections and once again allow insurance companies to charge Americans more -- we estimate up to $25,000 more -- due to a pre-existing condition.”
A copy of the letter from Nancy LeaMond to members of the U.S. Senate is attached.
What is the impact of the American Health Care Act on Alaskans?
#1: The bill as written reduces funding for Medicare, which will negatively affect beneficiaries.
The American Health Care Act shortens the life of Medicare, leaving the door open to benefit cuts and a voucher system. 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 78,892 Alaskans of all ages, or about 11 percent of the state’s population.
- About 86 percent of Alaskans with Medicare are over age 65 and 14 percent are younger people with disabilities under the age of 65.
#2: The bill unfairly penalizes older Americans with an Age Tax.
As currently written, 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 8,653 (or 6 percent of) Alaskans 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 43 percent of all adults receiving premium tax credit assistance in Alaska.
#3: The Age Tax would significantly increase premiums.
- A 55-year-old Alaskan earning $25,000 annually could see her premium increase by as much as $18,533.
- A 64-year-old Alaskan earning $25,000 annually could see his premium increase by as much as $28,210.
Alaskans simply cannot afford to pay the higher premiums.
- In 2015, half of all Alaskans ages 50-64 buying insurance in the individual market have incomes of $28,000 or less a year.
#4: The bill as written 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, significantly raising premiums and making health care unaffordable.
- About 50,801 (or 36 percent of) 50-64 year olds in Alaska have a pre-existing condition.
Under the current Affordable Care Act (ACA), insurance companies are banned from denying coverage, charging higher premiums or imposing coverage limits on people with pre-existing conditions. These protections are especially important for older adults because they are more likely than younger adults to have health problems. If an older Alaskan has a pre-existing condition and if the Senate passes the AHCA as written, he or she may be at risk for paying significantly more in premiums, possibly making health care unaffordable.
#5: The bill weakens protections for people with employer and individual 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.
- 92,396 (or 66 percent of) Alaskans ages 50-64 receive coverage through their employer, and they too could be affected by the bill.
- 8,653 (or 6 percent of) Alaskans ages 50-64 receive coverage through the individual market and could be affected by the bill.
#6: 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 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 181,000 Alaskans received health coverage and Long-Term Services and Supports (LTSS) through Medicaid.
• In FY 2013, about 16,000 low-income Medicare beneficiaries in Alaska received Medicaid.
Most people prefer to receive Long-Term Services and Supports (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.
• Alaska spent an average of $32,545 per Medicaid enrollee receiving HCBS compared to $96,445 per Medicaid enrollee served in a nursing facility.