Column -Republican health reform is the real disaster for older Americans

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By Mark Miller | CHICAGO

CHICAGO The Republican leadership in Washington
says Obamacare is an imploding disaster. But if your income is
low and your age is high, the real disaster is the
repeal-and-replace healthcare reform bill on offer from U.S.
President Donald Trump and House of Representatives Speaker Paul
Ryan.

The official congressional report card on the proposed
American Health Care Act (AHCA) was released this week, and it
concludes that older, low-income Americans will be its biggest
losers – ironically, many of the households that supported the
president’s bid for the White House.

The AHCA will jack up premiums for older low- to
middle-income users of the commercial insurance exchanges, and
roll back Medicaid coverage for very low income households,
according to the nonpartisan Congressional Budget Office (CBO).

Just as important, the AHCA proposes massive Medicaid
funding cuts that would reduce available financing for nursing
home care in the years ahead – just as demand for care is due to
explode.

Overall, the CBO found that 24 million Americans would lose
health insurance coverage in 2026, if the plan being considered
by the House of Representatives to replace the 2010 Affordable
Care Act were adopted. The coverage loss would fall
disproportionately on older people with low income, the report
found. The bill would remove the individual mandate requiring
people to buy insurance – and it would make exchange-purchased
insurance plans more expensive.

First, it would loosen current restrictions on “age rating”
– the extra amounts that insurers can charge older customers.
Under former President Barack Obama’s Affordable Care Act,
insurers can charge older enrollees three times as much as
younger ones. Under the AHCA, they could charge five times as
much.

Second, the AHCA repeals the Obamacare subsidies that offset
premiums for many lower- and middle-class buyers based on
income, and replaces them with flat tax credits based on age.
The change will not impact higher-income and younger buyers much
– and it could even reduce premiums in some cases, the CBO
found.

But premiums for a 64-year-old earning $26,500 would
increase by an eye-popping $12,900 in 2026, from $1,700 a year
now to $14,600, CBO reports. “There’s no way someone can
increase their premiums by that amount and still eat and have a
roof over their head,” said Debra Whitman, executive vice
president for policy at AARP, which is battling the AHCA
alongside associations representing physicians, hospitals and
insurers.

SHORTSIGHTED BILL

The political justification for all this is that the ACA is
a “disaster,” as the president and Ryan have put it. They point
to states where premiums have soared by more than 100 percent
and insurers have dropped out of the markets. While some state
exchanges have experienced these problems, that criticism is
overstated.

“There’s no question that the current system could be
improved by stabilizing risk pools, but it isn’t in a state of
utter collapse,” said Dan Mendelson, chief executive officer of
Avalere Health, a healthcare consulting and research firm that
studies the exchanges. “There are some markets that are
difficult, but that is the exception rather than norm.”

Meanwhile, the AHCA proposes a fundamental transformation of
Medicaid that would slash resources available to states to help
cope with aging populations.

Currently, Medicaid is jointly funded by states and the
federal government, with funding determined by actual healthcare
spending need. Under the AHCA, federal funding to states would
be capped on a per-beneficiary basis, based on what they spent
in 2016, with specific targets for each category of Medicaid
enrollees (the elderly, disabled, children and low-income
adults), plus an inflation adjustment. The Center on Budget and
Policy Priorities estimates that this provision would shift $370
billion in costs to the states over the next ten years.

“It locks in spending at the 2016 level,” said Whitman. “That might be OK for the first year or so, but we know that the
boomer generation is at the early edge of aging – in ten or 15
years, it is going to be older, and needing a lot of services.
But federal payments to states to meet that need wouldn’t
expand.”

Medicaid is the nation’s largest funder of long-term care –
in 2014, combined federal and state spending was about $152
billion, dwarfing the $9 billion paid out by private long-term
insurance underwriters, according to AARP research. Capping the
available dollars to meet long-term care need would force states
to cut back spending or fill the gaps without federal
assistance.

“The bill is so shortsighted,” said Stacy Sanders, federal
policy director for the Medicare Rights Center, a nonprofit
research and consumer advocacy group. “It shows a complete
unawareness that we have an aging society.”

The AHCA also threatens Medicaid funding for a program that
helps low-income seniors on Medicare pay for their healthcare.
The Medicare Savings Program helps pay for Part B premiums and
out-of-pocket costs. Although federal Medicaid dollars for the
program are exempted from AHCA cuts, 12 states and the District
of Columbia have opted to expand the program’s benefits by
loosening asset or income eligibility tests, and those
expansions could be threatened under AHCA, possibly impacting
2.4 million Medicare enrollees, according to an analysis by the
Medicare Rights Center.

The AHCA falls well short of Trump’s promise to pass health
reform that provides “insurance for everybody.” (reut.rs/2jBmc2E) From where I sit, it looks like bad policy and dumb politics,
all wrapped up in one ultra-rushed bill.

(The opinions expressed here are those of the author, a
columnist for Reuters.)



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