The House GOP plan repealing the Affordable Care Act (ACA) includes a number of measures that would reduce coverage and affordability for Kentucky’s older adults. If the proposal becomes law, more seniors will fall into poverty or lose access to care.
One element of the plan involves a change in tax credits. The ACA provides credits to help people buy coverage in the insurance marketplaces. These credits are bigger for low-income people and phase out as incomes increase. The House plan changes those credits so they are no longer based on income and makes them a flat tax credit that increases with age but ignores the cost of premiums (and premiums are higher for older people).
The result is cuts to credits for low-income older Kentuckians that greatly reduces their ability to afford insurance. Credits are 30 percent to 70 percent lower across Kentucky counties than the ACA credits, according to an analysis by the Kaiser Family Foundation. Here’s how much annual assistance is reduced for a 60 year old Kentuckian making $20,000 a year in a handful of counties:
- Pike: -$6,140
- Pulaski: -$3,220
- Fayette: -$2,550
- Logan -$5,800
- Campbell -$3,390
And a county-by-county breakdown is available here (larger version):
Along with much smaller credits, other aspects of the law will make premiums higher for older adults while increasing their out-of-pocket expenses:
- The amount insurance companies can charge older people is increased — whereas companies could charge only three times more than younger adults under the Affordable Care Act, they could charge five times more under the new plan.
- Premiums are also likely to be more expensive for older people because aspects of the plan will lead some healthy people (who tend to be younger) to skip getting covered.
- Plans will get weaker: the Congressional Budget Office (CBO) estimates the share of medical costs insurers will cover will drop from 87 percent to 65 percent for low-income Americans. This means that people will likely have to pay more in deductibles, co-insurance, co-pays, and other out-of-pocket expenses, ultimately hitting older people harder as they typically need more medical care. And the plan eliminates cost sharing subsidies in the Affordable Care Act that pay for those out of pocket costs for people with incomes between 100 percent and 250 percent of poverty.
- Adjusting the new tax credits only to the cost of inflation plus 1 percentage point means they will become even less valuable than the ACA credits (which grow as premiums increase) over time.
These changes add up: CBO estimates that a low-income 64 year old would see her net premium increase by $12,900, as premiums rise and subsidies drop.
As if that wasn’t enough, the bill makes other changes that hurt older adults:
- The plan effectively ends the Medicaid expansion in 2020, denying Medicaid coverage to older Kentuckians who would otherwise qualify.
- By capping federal Medicaid funding in the future, as the plan does, coverage for seniors is further threatened as dollars are squeezed over time. Medicaid pays for long-term care for low-income seniors, along with coverage for kids, people with disabilities and low-income people.
- By providing tax cuts for wealthy individuals, the plan takes money from Medicare — speeding up the date when the Medicare trust fund becomes insolvent and likely leading to more cuts to Medicare benefits in the future.
These reasons and more are why AARP opposes the bill.
The impact on seniors is just one of the reasons Congress must reject the House plan, which will dramatically reduce the number of Kentuckians covered, squeeze the state’s budget and economy and set back Kentuckians’ health.
Updated March 15, 2017