AARP turns up the heat

A new initiative from AARP contends the American Health Care Act, better known as the AHCA, will be bad for seniors, and cites specific impacts to Alaskans. The Act is headed to the U.S. Senate after passage May 4 by the House of Representatives, as a replacement to the Affordable Care Act, known also as Obamacare.

“Tens of thousands of Alaskans will be adversely affected if the AHCA passes,” headlines a May 22 AARP press statement, forwarded to Senior Voice by AARP’s Alaska office. The statement was attached to a letter from AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond, who urged members of the U.S. Senate to drop the AHCA and “start from scratch” and “craft health care legislation that ensures robust insurance market protections, controls costs, improves quality, and provides affordable coverage to all Americans.”

AARP is the nation’s largest non-profit advocacy group, with more than 87,000 members in Alaska.

In the letter, LeaMond notes that insurance companies could charge older Americans five times – or more – for coverage, and charge many Americans more than their take home pay, noting, “The median annual income for 50 to 64 year old Americans is less than $25,000… [The House health bill] would remove pre-existing condition protections and once again allow insurance companies to charge Americans more – we estimate up to $25,000 more – due to a pre-existing condition.”

In a separate statement, AARP presents several points of contention with the AHCA proposals – which will be voted on by Alaska Senators Lisa Murkowski and Dan Sullivan (Rep. Don Young already voted in support of the AHCA legislation). The statement spells out the following specific impacts.

The bill as written reduces funding for Medicare, which will negatively affect beneficiaries. The American Health Care Act shortens the life of Medicare, leaving the door open to benefit cuts and a voucher system. The bill repeals a 0.9 percent payroll tax on higher-income workers, which would remove over $100 billion over 10 years from the Hospital Insurance trust fund. This would hasten the insolvency of Medicare and diminish Medicare’s ability to pay for services in the future. The bill also removes nearly $25 billion in required payments from pharmaceutical companies over 10 years from the Part B trust fund, which would increase premiums for people on Medicare.

• In 2016, Medicare provided coverage for 78,892 Alaskans of all ages, or about 11 percent of the state’s population.

• About 86 percent of Alaskans with Medicare are over age 65 and 14 percent are younger people with disabilities under the age of 65.

The bill unfairly penalizes older Americans with an Age Tax. As currently written, the bill discriminates against 6.1 million Americans ages 50 to 64 in the individual (non-group) health insurance market by allowing insurance companies to charge older people five times or more what others pay for the same coverage. At the same time, it significantly reduces tax credits now available to lower and middle-income older persons to help pay premium costs.

• About 8,653 (or 6 percent of) Alaskans between the ages of 50 and 64 are enrolled in the individual market and would be impacted by the AHCA’s age tax.

• 50- to 64-year-olds comprise 43 percent of all adults receiving premium tax credit assistance in Alaska.

The Age Tax would significantly increase premiums.

• A 55-year-old Alaskan earning $25,000 annually could see her premium increase by as much as $18,533.

• A 64-year-old Alaskan earning $25,000 annually could see his premium increase by as much as $28,210.

• Alaskans simply cannot afford to pay the higher premiums.

• In 2015, half of all Alaskans ages 50-64 buying insurance in the individual market have incomes of $28,000 or less a year.

The bill as written removes protections for people with pre-existing health conditions. It would allow insurance companies to once again charge higher premiums based on a person’s health condition, significantly raising premiums and making health care unaffordable.

• About 50,801 (or 36 percent of) 50 to 64 year olds in Alaska have a pre-existing condition.

• Under the current Affordable Care Act (ACA), insurance companies are banned from denying coverage, charging higher premiums or imposing coverage limits on people with pre-existing conditions. These protections are especially important for older adults because they are more likely than younger adults to have health problems. If an older Alaskan has a pre-existing condition and if the Senate passes the AHCA as written, he or she may be at risk for paying significantly more in premiums, possibly making health care unaffordable.

The bill weakens protections for people with employer and individual coverage. It allows states to waive federal standards for minimum coverage (known as Essential Health Benefits), allowing insurers to sell less comprehensive, potentially even skimpy coverage. The bill also weakens protections that ensure a person doesn’t end up with catastrophic out-of-pocket costs. This weakening includes the requirement that insurance companies must limit consumers’ annual out-of-pocket costs (such as deductibles and copays). It also includes the ban on insurance companies setting caps on how much they would cover annually, or over a person’s lifetime. These changes would affect people in the individual market and those with employer-sponsored coverage. The result would be less choice and reduced access to needed services for people with pre-existing conditions or who need medical care.

• 92,396 (or 66 percent of) Alaskans ages 50 to 64 receive coverage through their employer, and they too could be affected by the bill.

• 8,653 (or 6 percent of) Alaskans ages 50 to 64 receive coverage through the individual market and could be affected by the bill.

The bill cuts over $800 billion from Medicaid. The bill creates a capped financing structure in the Medicaid program and cuts $839 billion – nearly 25 percent – over 10 years. Both per capita cap and block grant financing would likely shift significant costs to states and families. The bill could lead to cuts in provider payments, program eligibility, services, or all of the above – ultimately harming some of our nation’s most vulnerable citizens.

• In 2017, more than 181,000 Alaskans received health coverage and Long-Term Services and Supports (LTSS) through Medicaid.

• In FY 2013, about 16,000 low-income Medicare beneficiaries in Alaska received Medicaid.

Most people prefer to receive Long-Term Services and Supports (LTSS) in their homes and communities. Nursing home care is generally more expensive than serving people in the community, but home and community-based services (HCBS) is an optional service in Medicaid. Cutting federal Medicaid spending jeopardizes access to HCBS, forcing people to rely on more expensive nursing home care.

• Alaska spent an average of $32,545 per Medicaid enrollee receiving HCBS compared to $96,445 per Medicaid enrollee served in a nursing facility.