How the New Obamacare Repeal Would Hike Older Americans’ Costs

Photo by zenstock / Shutterstock.com

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.

How to find cheaper car insurance in minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

Read Next
3 Big Medicare Costs Just Got Bigger
3 Big Medicare Costs Just Got Bigger

Some Medicare premiums and deductibles for 2020 will take a bigger bite out of Social Security payments.

14 Things We Buy and Then Almost Never Use
14 Things We Buy and Then Almost Never Use

Save your money. These items seem alluring but they often end up as coat racks and dust magnets.

7 Tricks to Cleaning Your Bathroom in Minutes
7 Tricks to Cleaning Your Bathroom in Minutes

These tips can get your bathroom sparkling with little time and no elbow grease.

10 Tools You Need for Financial Stability
10 Tools You Need for Financial Stability

Have these tools and accounts in place so you can weather whatever comes your way.

This Is the Top Home Insurer — for 18 Years Running
This Is the Top Home Insurer — for 18 Years Running

Homeowners are increasingly unhappy with their insurance companies, but one stands out for the better.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
Will I Get My Ex-Husband’s Social Security When He Dies?
Will I Get My Ex-Husband’s Social Security When He Dies?

Two factors determine how much money is coming to you.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

21 Things You Should Always Buy at a Dollar Store
21 Things You Should Always Buy at a Dollar Store

Dollar stores have great bargains on these familiar purchases. Yes, even pregnancy tests.

13 Brilliant Bulk-Buy Items on Amazon
13 Brilliant Bulk-Buy Items on Amazon

Every household should have these products on hand. Buying them in bulk on Amazon saves you cash.

6 Reasons I Will Never Trust Suze Orman
6 Reasons I Will Never Trust Suze Orman

Beware: The self-proclaimed personal finance expert has a track record that suggests more sizzle than steak.

This Type of Social Security Benefit Is Often Overlooked
This Type of Social Security Benefit Is Often Overlooked

The Social Security Administration is not helping certain people get money to which they are entitled, a report says.

Getting These 2 Shots Could Reduce Your Risk of Dementia
Getting These 2 Shots Could Reduce Your Risk of Dementia

These vaccines may lower the risk of Alzheimer’s disease by up to 40%.

8 Deep Discounts Available on Amazon This Friday
8 Deep Discounts Available on Amazon This Friday

These items are all steeply discounted — but the deals won’t last long.

9 Everyday Problems You Can Solve With Vaseline
9 Everyday Problems You Can Solve With Vaseline

Forget expensive specialty products. Good ol’ petroleum jelly can address many common annoyances.

16 Amazon Purchases That We Are Loving Right Now
16 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

19 Purchases That Buyers Almost Always Regret
19 Purchases That Buyers Almost Always Regret

Think twice before buying these things.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

7 Tips for Building an Emergency Stockpile
7 Tips for Building an Emergency Stockpile

A pandemic or natural disaster could leave you reliant on your existing food supply. Is your pantry prepared?

Homeowners Say These 2 Kitchen Appliance Brands Are Best
Homeowners Say These 2 Kitchen Appliance Brands Are Best

One brand takes five of the top honors, while another ranks highest in three categories.

Is a Second Stimulus Check Still Coming?
Is a Second Stimulus Check Still Coming?

The status of another round of direct payments to taxpayers is a mix of good and bad news.

41 Things You Should Never Buy
41 Things You Should Never Buy

Some purchases are just plain dumb. Give yourself — and your budget — a break. Don’t spend money on this stuff.

9 Indestructible Products That Are Worth the Price
9 Indestructible Products That Are Worth the Price

If you’re willing to pay a little more for these products, you may never have to shop for another again.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

8 Ways to Slash Your Internet Bill
8 Ways to Slash Your Internet Bill

No matter what price you are paying for internet service, taking these simple steps can lower it.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.