How the New Obamacare Repeal Would Hike Older Americans’ Costs

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Republicans have resuscitated efforts to scale back the Affordable Care Act, the federal law commonly known as Obamacare.

With a deadline looming, the U.S. Senate is expected to vote next week on Republicans’ latest health care reform legislation. It’s formally known as the Graham-Cassidy-Heller-Johnson proposal, with senators referring to it as “Graham-Cassidy” and “GCHJ” for short.

It’s named for the four current U.S. senators behind the proposal:

  • Lindsey Graham (R-S.C.)
  • Bill Cassidy (R-La.)
  • Sen. Dean Heller (R-Nev.)
  • Ron Johnson (R-Wis.)

As those senators describe the legislation, it “repeals the structure and architecture of Obamacare and replaces it with a block grant given annually to states to help individuals pay for health care.”

Their press release continues:

“The grant dollars would replace the federal money currently being spent on Medicaid Expansion, Obamacare tax credits, cost-sharing reduction subsidies and the basic health plan dollars.”

Block grants are a form of federal assistance, generally for state governments. They allow those lawmakers to decide how to spend the funding, within the confines of the applicable law.

Opposition to the latest Obamacare repeal effort

Meanwhile, numerous health care-related organizations have spoken out against the Graham-Cassidy proposal.

On Thursday, Vox published a roundup of groups opposed to the effort. They include the American Medical Association, the Alzheimer’s Association and the Blue Cross Blue Shield Association. Other organizations that have issued statements criticizing the legislation include the American College of Physicians and the American Geriatrics Society.

Many critics have voiced concerns about how the Graham-Cassidy proposal would affect Medicaid, the federally subsidized health insurance program primarily reserved for low-income households. Under the Affordable Care Act, the program was expanded in states that opted for a Medicaid expansion, effectively making the program accessible to more people in those states.

Multiple health care-related groups also have expressed worries about how the Graham-Cassidy legislation would impact older Americans. Groups like AARP have gone so far as to say the Graham-Cassidy legislation would create an “age tax.”

What’s at stake for older people?

Under the Affordable Care Act, health insurance companies can base premiums on five factors, one of which is age. Insurers can set older people’s premiums no more than three times higher than premiums for younger people.

AARP has said the Graham-Cassidy proposal would create an “age tax for older Americans,” in part because it would enable states to waive that age-based premium limit.

The proposal also does away with tax credits that make health insurance more affordable for seniors. An AARP analysis found that about half of the 6 million 50- to 64-year-olds who buy their own insurance now receive these credits.

One example from the advocacy group’s analysis:

“… for a 60-year-old earning $25,000 a year, premiums and out-of-pocket costs could increase by as much as $16,174 a year. If that 60-year-old lives in a state that allows insurers to charge older individuals dramatically higher premiums, he or she would face an additional $4,124 increase in premiums.”

AARP has also noted that the Graham-Cassidy legislation’s changes to the Medicaid program could negatively impact older people receiving Medicaid assistance. The Alzheimer’s Association noted that those currently enrolled in Medicaid include more than 1 in 4 seniors with forms of dementia, including Alzheimer’s.

One bright side of the Graham-Cassidy proposal applies to older Americans — and everyone else — who use a health savings account. The American Bankers Association is one group that has spoken out in favor of the proposal due to its expansion of HSAs.

The group’s HSA Council wrote in a letter to Sens. Graham and Cassidy:

“Much like the bill it would replace, your proposal expands an HSA owner’s ability to contribute to their account and repeals the excise tax that would apply, unfairly, to employer plans that utilize HSAs.”

What to watch in coming days

Republicans have better odds of passing the Graham-Cassidy legislation if they do so before Oct. 1. According to the Washington Post:

“… it boils down to the fact that on Oct. 1, the number of votes needed to pass Cassidy-Graham will rise above the number of Republicans in the Senate, effectively blocking the bill’s path.”

Until then, the GOP could pass the legislation with as few as 50 votes, with Vice President Mike Pence presumably casting a tie-breaking vote in their favor. Gathering even 50 votes won’t necessarily be easy, though.

As of Thursday, Reuters reports that one Republican senator, Rand Paul of Kentucky, opposed the legislation. At least five other Republicans were undecided on it:

  • Susan Collins (Maine)
  • Lisa Murkowski (Alaska)
  • Dan Sullivan (Alaska)
  • John McCain (Arizona)
  • Jerry Moran (Kansas)

Late Friday, however, McCain joined Paul in opposing the legislation. In a statement on his website, he cited the influence of the Sept. 30 on the legislative drafting process and noted that a Congressional Budget Office (CBO) analysis of the proposal wouldn’t be out before then:

“I cannot in good conscience vote for the Graham-Cassidy proposal. I believe we could do better working together, Republicans and Democrats, and have not yet really tried. Nor could I support it without knowing how much it will cost, how it will affect insurance premiums, and how many people will be helped or hurt by it. Without a full CBO score, which won’t be available by the end of the month, we won’t have reliable answers to any of those questions.”

What’s your take on the latest health care reform effort? Sound off below or over on our Facebook page.

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