Thought the debate over the health law was over? Not quite. Yes, Congress has shifted its focus from health care to tax reform over the past couple months. But health care faces new threats under the latest proposed tax legislation.
The Tax Cuts and Jobs Act as reported by the Senate Finance Committee on Nov. 16, 2017 includes a new provision that would both reduce health care coverage and increase costs for millions of Americans. Older adults ages 50-64 would be at particularly high risk under the proposal, facing average premium increases of $1,500 in 2019 as a result of the bill.
Older Adults Would Face Higher Premiums
The new provision in the Senate tax bill effectively eliminates the current health law’s requirement that most people have health insurance coverage. Lawmakers are inserting this change into the tax debate to help pay for other changes they want to make to the tax code.
Unfortunately, this change will mean higher premiums for everyone who needs to purchase coverage on the individual (non-group) health insurance market. The non-partisan Congressional Budget Office (CBO) estimates that premiums will increase by an average of 10 percent, thanks to the pool of people continuing to purchase health insurance coverage being less healthy on the whole.
The impact will be especially hard on older adults, who will see the largest price increases even though they already pay premiums up to three times higher than others. As a result of the tax bill, for federal Marketplace coverage in 2019*:
- Premiums for 50-year-olds could increase by an average $890, rising to $9,780 a year.
- Premiums for 55-year-olds could increase by an average $1,110, rising to $12,200 a year.
- Premiums for 60-year-olds could increase by an average $1,350, rising to $14,860 a year.
- Premiums for 64-year-olds could increase by an average $1,490, rising to $16,420 a year.
Actual premium increases will vary by state, with some states seeing much higher increases for older adults. In Maine, a typical 64-year-old could see her premiums increase an average $1,750 a year (to $19,220), while in Alaska, she could see her premiums increase an average $2,150 a year (to $23,650).
13 Million Fewer Americans Would Have Health Insurance Coverage
Eliminating the health care coverage requirement would also mean that millions more Americans will become uninsured. CBO has estimated that 4 million people under age 65 would no longer have health insurance coverage as early as 2019 if this provision is enacted. By 2027, that number would rise to 13 million people left without coverage.
Since enactment of the ACA, the uninsured rate for 50- to- 64-year-olds has fallen significantly, from 15% in 2013 to 9% in 2016. The Senate tax bill provision threatens to reverse these critical coverage gains, meaning a harmful step backward for older adults.
The bottom line – the new health care provision in the Senate tax bill will increase premiums for older adults and lead to millions more uninsured.
* Calculations by AARP Public Policy Institute
Jane Sung is a senior strategic policy adviser with AARP’s Public Policy Institute, where she focuses on health insurance coverage among adults age 50 and older, private health insurance market reforms, Medicare Advantage, Medigap, and employer and retiree health coverage.
Olivia Dean is a policy analyst with the AARP Public Policy Institute. Her work focuses on a wide variety of health-related issues, with an emphasis on public health, health disparities, and private coverage.
AARP Chief Advocacy and Engagement Officer Nancy LeaMond was recently named a 2017 Top Lobbyist by The Hill.
This year, she is being recognized in the grass roots category, which includes power players in the Nations Capital.
During her tenure at AARP, LeaMond has led several landmark campaigns, including: Take A Stand, You’ve Earned a Say, Health Action Now and Divided We Fail.
LeaMond is a nationally recognized leader in health, retirement security and other issues important to older Americans. Her career spans nearly 40 years in the government and nonprofit sectors.
She has been named by The Hill as one of the Top Lobbyists every year since 2011.
The budget blueprint recently passed by the House proposes to redesign Medicare—the program that nearly all Americans ages 65 and older and millions of younger people with disabilities rely on for health coverage. The proposal would transform Medicare into what’s termed a “premium support” or “voucher” program. This change would have a huge impact on people with Medicare today and in the future.
Premium support would be a dramatic change from the current Medicare design. Today, if you want to enroll in traditional Medicare, you would pay the same premium for Part B (which covers doctors’ visits), and typically have no premium for Part A (which covers hospital services) regardless of where you live. In addition, you could choose traditional Medicare or enroll in one of the private health plans (called Medicare Advantage plans) available in your location.
With premium support, however, you would instead get a specified dollar amount (or voucher) to use toward buying health coverage. You would have to choose between competing plans—which would include private health plans and traditional Medicare coverage—each with its own price. The amount you pay will be the difference between the price of the plan and the voucher, so if you choose a higher-priced plan, you would pay more than if you choose a lower-priced plan.
In addition, you would likely have fewer choices under a premium support program—and the available options would differ dramatically depending on where you live. While proponents argue that premium support would enhance opportunities for people with Medicare to choose a coverage option that matches their preferences, a new AARP-funded research report by the Urban Institute challenges this claim. As shown in the report (and AARP Public Policy Institute summary), premium support would reduce—not increase—options for individuals, compared with what they have now:
- Many people who prefer traditional coverage—the option that most people with Medicare choose today—would see steep increases in their premiums. As a result, many would have to either pay much more for their preferred option or choose something else.
- In some locations, the premiums for traditional Medicare would be so expensive that it would be unaffordable for most people and thus not a real option for them.
- In other places, private plans—which are now available in nearly all locations and chosen by about one-third of people with Medicare—would be more expensive than traditional Medicare. In some markets, private plans would not be able to attract enough enrollees to be successful, so individuals living in those places would no longer have this option.
The current combination of Medicare Advantage and traditional Medicare promotes private plan competition and offers individuals a choice of options. In contrast, premium support would place a large burden on the vulnerable Medicare population and force many people into a plan based on affordability. Under premium support, traditional Medicare’s current wide choice of physicians, hospitals, and other providers would likely only be available to higher-income people in some locations, while private plans would cease to exist in others.
A late-breaking attempt to repeal and replace the Affordable Care Act (ACA) threatens to weaken critical federal consumer protections and raise costs for older Americans ages 50-64 who purchase health insurance coverage in the individual market. Tucked into the sweeping legislation known as the Graham-Cassidy bill are provisions allowing states to receive waivers from crucial consumer protections. Such waivers could allow insurance companies to increase costs for older consumers based on their health, preexisting conditions, and age–potentially putting health coverage out of financial reach for millions.
People with Preexisting Conditions Could Face Significantly Higher Premiums
Current law prohibits health insurance companies from denying people coverage or charging higher rates based on a person’s health. Under the Graham-Cassidy bill, however, states could obtain a waiver to allow insurers to vary premiums based on people’s health or preexisting condition. This means that consumers with a health condition such as diabetes, cancer, or heart disease could face significantly higher premiums.
This would hit older adults hard: 40 percent of 50- to 64-year olds have a preexisting condition. Prior to the ACA, most states allowed insurers to charge higher premiums based on preexisting conditions. That meant consumers with preexisting conditions were often unable to purchase affordable coverage. The Graham-Cassidy bill would force consumers to, once again, worry about whether their health status will keep them from being able to afford coverage or the care they need.
Less Coverage and Higher Costs for Older Adults and People with Preexisting Conditions
The Graham-Cassidy bill would also allow states to waive current law requirements that health insurance plans cover 10 categories of services (known as Essential Health Benefits). Similar to earlier proposals, states could eliminate some or all of the required benefits. Without these requirements, insurers could choose to exclude or limit important health benefits such as hospital care, prescription drugs, and mental health or substance abuse treatment. For people with health concerns and preexisting conditions, finding adequate, affordable coverage with the benefits they need would very likely become challenging and expensive.
These waivers may also allow states to weaken or eliminate the ACA’s prohibition against dollar limits on benefits people may get in a year or over their lifetime. Such annual and lifetime caps were unfortunately common practice prior to the ACA—forcing some consumers into medical bankruptcy when they got sick. Weakening these key protections is a step backwards for consumers.
Insurance Companies May be Allowed to Discriminate Against Older Americans
Under the ACA, insurers cannot charge older adults more than three times what they charge others for the same coverage (known as 3:1 age rating). Under Graham-Cassidy, however, states may be able to waive this critical protection for older adults. Older adults living in states that have waived that protection would face significantly higher rates simply on the basis of age– potentially as high as five, six or more times what they charge others for the same coverage, depending on the state.
In short, the Graham-Cassidy bill is harmful for older adults and people with preexisting conditions. It would undermine critical consumer protections, making health insurance coverage unaffordable and denying people with health conditions the care they need.
Prescription drug abuse is a serious and growing public health issue in the United States. While media attention and policy efforts often focus on younger populations, older adults are not immune to the problem. A new AARP Public Policy Institute report finds that while the prevalence of prescription drug misuse is higher among younger ages, it would be a mistake to overlook such behavior among older adults. Here’s why.
First, a number of factors make older adults more susceptible to prescription drug misuse. Older adults typically take more prescription medications than younger adults (figure 1)—often multiple drugs at the same time—increasing the likelihood of problems arising. Age-related physical, emotional, cognitive, and functional changes can also increase the potential for misuse, either unintentional or intentional.
Further, prescription drug abuse often goes unrecognized or misdiagnosed in older adults. There are several possible explanations, including coexisting health conditions that can make it hard to identify abuse. Meanwhile, providers often lack the training and diagnostic criteria needed to properly detect the problem.
The result? Many older adults who abuse prescription drugs never receive a proper diagnosis or treatment.
This is a complex issue that policymakers and health professionals should tackle accordingly. As our aging population grows, the number of older adults at risk for abusing prescription drugs will likely grow as well. We need age-appropriate diagnostic and treatment practices that focus on changing prescriber behavior (like limiting overprescribing) and improving access to effective treatments for prescription drug abuse. At the same time, it’s also important to ensure that policymakers don’t implement overly broad policies that could limit access to prescription drugs for older adults with legitimate health needs.
Finally, everyone, not just providers, must become aware of this issue. It’s critical that family caregivers and the general public understand the potential for and consequences of prescription drug abuse among older adults. Among older adults ages 50-64 who abuse painkillers, 42 percent get them from friends or family (figure 2). Addressing prescription drug abuse among older adults will require everyone working together.
Olivia Dean is a policy analyst with the AARP Public Policy Institute. Her work focuses on public health, mental health, health disparities and healthy behavior.
As the Senate defeated the “skinny” health care repeal bill this morning, AARP thanked Republican Senators Susan Collins, John McCain, and Lisa Murkowski, as well as Senate Democrats and Independents for opposing the bill.
AARP strongly opposed all of the health care repeal bills this week, because each which would ultimately have resulted in higher costs and less coverage for Americans age 50-plus.
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