Older workers headed toward retirement are some of the biggest losers under the GOP legislation to replace the Affordable Care Act.
By slashing their financial assistance for coverage, allowing insurers to charge them more and repealing taxes that boost Medicare’s shaky finances, the GOP bill poses a triple threat to the health and well-being of working adults ages 50 to 64.
When the health law was enacted in 2010, people in this age group were the fastest-growing group of uninsured in the country because many couldn’t get individual coverage due to pre-existing medical conditions, said David Certner, legislative policy director at AARP.
In the first two years after the Affordable Care Act was implemented, the uninsured rate for 50- to 64-year-olds fell 47 percent, AARP research found.
The Republican legislation puts that trend in dire jeopardy.
$1,524 The average annual increase in premiums that adults in their 50s would see under the Republican plan, according to an AARP study
$3,192 The average annual premium increase for those 60 and older under the GOP plan
“This is a big comprehensive step back from some of the gains that we’ve made since the enactment of the Affordable Care Act,” Certner said.
Today, 6.1 million people ages 50 to 64 have individual insurance and 3.2 million are eligible for federal tax credits and subsidies to help pay for coverage.
The Republican measure would cut that financial assistance by $673 billion in 2020 by eliminating the subsidies and providing smaller tax credits based on age rather than income and costs.
The bill also would allow insurers to charge older people up to five times more for coverage than younger adults. Tax credits for older people, however, would be only twice as large as those for younger adults.
In a decade, a 64-year-old earning $26,500 a year would see their annual premium jump from $1,700 under Obamacare to $14,600 under the Republican plan.
A study commissioned by AARP found that premiums for those 60 and over would jump an average of 22 percent, or $3,192, per year because of the higher prices.
Adults in their 50s would see an average 13 percent increase of about $1,524 per year.
With less financial help and higher costs, older people will be hit with a “double whammy,” Certner said: losing access to coverage and paying more for it under the Republican plan.
“The Republican plan rips benefits away from lower-income and older Americans while rewarding upper-income earners with billions of dollars in tax breaks. It achieves federal budget savings on the backs of the people who can least afford to sacrifice,” said a blog post this week by the National Committee to Preserve Social Security & Medicare, a nonpartisan advocacy group.
After applying a $4,900 tax credit, a 64-year-old earning $26,500 a year would face annual premiums of $14,600 by 2026 under the GOP bill, the CBO reported.
Under the Affordable Care Act, that person would receive a $13,600 tax credit by 2026 and pay premiums of just $1,700 a year.
Certner said the Republican bill would force some older people with low incomes to pay more than half their livelihood for coverage.
The share of uninsured 50- to 64-year-olds would roughly double to 30 percent under the legislation by 2026, the CBO found. Those “with income of less than 200 percent of the federal poverty level would make up a larger share of the uninsured,” the CBO reported.
Twice as many people aged 50-64 would be without health insurance in a decade under the Republican plan vs. the Affordable Care Act.
In a recent statement, James Firman, president and CEO of the National Council on Aging, said the lack of coverage could come back to haunt the federal government.
“When members of this age group cannot afford care, they often come into Medicare less healthy, costing more than adults who have insurance prior to Medicare eligibility,” Firman said.
Medicare’s bottom line would also suffer because the GOP bill repeals a payroll tax on wages above $200,000 that funds Medicare’s Hospital Insurance Trust Fund.
Based on CBO projections, the legislation would push the trust fund into insolvency in 2023 rather than 2025, and “increase primary deficits in the trust fund by $150 billion through 2026,” according to the Committee for a Responsible Federal Budget, a nonprofit fiscal-policy organization.
“This opens the door for the ‘reformers’ to argue even more vehemently for privatizing Medicare and turning it into a voucher program, which will hurt seniors with low or modest incomes,” said the blog by the National Committee to Preserve Social Security & Medicare.
The legislation would also repeal a fee on the drug industry that pumps $25 billion over 10 years into another Medicare trust fund that pays for services like outpatient hospital care, medical equipment and lab tests.
Repealing the Affordable Care Act’s taxes would cost roughly $575 billion in lost federal revenue over the next decade.