Health Care Bill Endangers Coverage

A new analysis of the American Health Care Act passed by the House of Representatives estimates that 23 million people would lose their health insurance if the bill were enacted into law. People age 50 to 64 would be hit particularly hard, especially those with lower incomes.

According to the nonpartisan Congressional Budget Office (CBO), premiums for a 64-year-old earning $26,500 a year would increase by a whopping $14,400 in 2026. In addition, people with preexisting conditions may not even be able to purchase health insurance because the prices would be prohibitively high.

Three weeks ago, the House voted 217 to 213 to repeal and replace the Affordable Care Act (ACA) without waiting for the CBO to analyze the effects of the legislation. Today the CBO and the staff of the Joint Committee on Taxation (JCT) provided their assessment, which is required before the bill can be sent to the Senate for consideration.

Among other things, the CBO estimated a reduction in the deficit of $119 billion under the bill over a 10-year period.  The bill would lower health-related spending by the federal government through steep reductions in Medicaid and the replacement of current subsidies with less-generous tax credits. At the same time, the bill would grant large tax cuts to drugmakers and insurance companies.

The congressional analysts warn that for a significant segment of the population, the individual insurance market “would start to become unstable in 2020” because of two provisions added to the House bill in the days before the May 4 vote. One would allow states to receive waivers allowing insurers to eliminate coverage for essential health benefits, such as emergency services, hospitalization and chronic disease management. The other is a waiver that would allow insurers, contrary to current law, to charge higher premiums to people with preexisting conditions such as cancer and diabetes.

According to the report, “less healthy people would face extremely high premiums” in states likely to receive these waivers. “People who are less healthy (including those with preexisting or newly acquired medical conditions) would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all.”

AARP reiterated its strong opposition to the bill and called on the Senate to shelve the House-passed legislation. AARP said the bill would impose an “age tax” on older Americans by allowing insurers to charge premiums five times what they charge others and cutting the current level of subsidies.

“The CBO analysis found that premiums would go up to unaffordable levels by inflicting an age tax and removing current protections for people with common conditions including diabetes and weight gain,” said Nancy LeaMond, AARP Executive Vice President. “Putting a greater financial burden on older Americans is not the way to solve the problems in our health care system.”

AARP said it rejected the bill because it worsens the financial outlook for Medicare by reducing Medicare’s revenue and slashes Medicaid spending by over $800 billion over 10 years.