Yesterday the House of Representatives passed the AHCA (American Health Care Act). The changes to the healthcare system will significantly hurt seniors. According to the national organization, Justice in Aging, 24 million Americans are in danger of losing their health care coverage. The National Academy of Elder Law Attorneys (NAELA) summarized the changes as they relate to Seniors as follows:
Key Medicaid Changes
- Enacts per-capita caps. The legislation would end Medicaid’s current open-ended financing system. Instead, states would receive from the federal government a fixed dollar amount per beneficiary starting in 2020. The fixed dollar amount will use 2016 as the base year and will vary by state and by beneficiary designation (elderly, blind and disabled, children, non-expansion adults, and expansion adults). The dollar amount per beneficiary will grow by medical inflation plus 1% for the elderly, blind, and disabled populations. In addition, states would have the option to receive a lump-sum for the non-disabled adult and children population in exchange for limited oversight and a lower federal contribution growth rate. The Act makes no changes to the requirements of state participation beyond those listed below. Effectively ends Medicaid expansion. Starting in 2020, Medicaid expansion may continue, but states will receive financing at their traditional FMAP level and subject to a per-capita cap. Experts anticipate that the cost shift would likely lead expansion states to stop enrolling people in their expansions in 2020.
- Effectively ends Medicaid expansion. Starting in 2020, Medicaid expansion may continue, but states will receive financing at their traditional FMAP level and subject to a per-capita cap. Experts anticipate that the cost shift would likely lead expansion states to stop enrolling people in their expansions in 2020.
Key Health Insurance Changes
- Maintain continuous coverage or face a 30% penalty. The individual mandate would be repealed, but insurers could still not discriminate based on pre-existing conditions. In exchange, any applicant who does not have coverage for 63 days or more would face a 30% penalty on top of their base premium for 12 months in order to re-enroll in a plan.
- Allow insurers to charge older adults more for a plan. Current law limits insurers from charging more than three-to-one for the same plan between older and younger adults. This provision loosens the ratio to five-to-one.
- Refundable tax credit now based on age:
- Under age 30: $2,000
- Between 30 and 39: $2,500
- Between 40 and 49: $3,000
- Between 50 and 59: $3,500
- Over age 60: $4,000
The credits are additive for a family and capped at $14,000. The credits grow over time by inflation plus 1%. The credits are available in full to those making under $75,000 per year ($150,000 joint filers). The credit phases out by $100 for every $1,000 in income higher than those thresholds.
- State Waivers for Essential Health Benefits and Pre-existing Conditions. States may seek waivers, including of Essential Health Benefits and for the “community rating” provision that requires insurers to charge the same rate, except for a narrow rules band based on age and tobacco use. This means that states under a waiver could allow insurers to charge for those with pre-existing conditions.
Be sure to contact your Senator about your concerns about this legislation before it is too late.