The American Foundation for the Blind is proud to be a member of Leadership Council of Aging Organizations (LCAO), the country’s preeminent coalition representing older Americans.
This week we joined the LCAO in expressing our strong opposition to provisions of the House-passed American Health Care Act (AHCA) because of the harm they would inflict on our nation’s seniors. The following are key points taken from a letter to Senate Majority Leader McConnell and Minority Leader Schumer.
We are deeply concerned that the AHCA would:
- Increase the number of uninsured Americans by 23 million
- Significantly increase health care costs for millions more—particularly older adults
- Cut Medicaid by $834 billion
- Impose strict per capita caps on federal contributions to Medicaid, which have nothing to do with repealing the Affordable Care Act (ACA)
- Jeopardize critical home and community-based services (HCBS), nursing home care, and other services for family members with disabilities
- Dramatically increase health care costs and make coverage less available for older adults aged 50-64 who are not yet eligible for Medicare
- Weaken current consumer protections that limit consumers’ out-of-pocket spending and prohibit insurance companies from capping benefits on an annual and lifetime basis, even for people covered by large employers
Medicaid Proposals Harm Older Americans, Especially Those Needing Long-Term Care
Medicaid is a lifeline for 7 million low-income seniors. Medicaid covers 2 in 3 nursing home residents. With nursing home care often costing about $100,000 a year, seniors quickly run through their life savings before turning to Medicaid.
Home and community-based services (HCBS), which are not covered by Medicare, enable older Americans and people with disabilities to stay in their own homes and with their families. They are cost-effective, and they help struggling family caregivers keep loved ones together.
But HCBS are at greatest risk of major cuts because they are optional under Medicaid, while nursing home care is mandatory. On average, Medicaid dollars support nearly 3 older people and adults with disabilities with HCBS for every 1 person in a nursing home.
The AHCA also repeals Community First Choice (CFC) funding, which would further reduce access to cost-effective HCBS.
The Administration also recently proposed dialing down growth rates to cut Medicaid by an additional $610 billion. The total combined Medicaid cut would be about $1.3 trillion over 10 years—a massive, unprecedented 45% cut in 2026.
Under per capita caps, the federal government provides states with a fixed, limited payment based on a preset formula that would inevitably fail to reflect fluctuating service needs among states and their residents during periods of economic growth and recession, as well as real growth in long-term care costs. State variations in spending would be permanently frozen in place based on 2016 costs, creating problems for all states and especially those that faced budget constraints or reduced spending in that year.
The effect will be a huge increase in costs being passed on to states. Some states will use state tax dollars to make up for the loss in federal funds—meaning that they’re either raising taxes (unlikely) or taking money from other important state programs. Other states will not have enough resources to make up for the loss of funds and thus will reduce services.
Other important Medicaid per capita cap concerns include:
- The caps fail to account for the growing aging population and the fact that seniors aged 85+ have 2 1/2 times higher Medicaid costs than people aged 65-74. The 85+ population is the nation’s fastest growing age group and is projected to triple by 2050.
- Proposed Medicaid cuts will result in significant job losses and reduced wages for health and long-term care workers and lower economic growth. Many of the estimated 4.4 million nursing facility and home care workers Medicaid pays for would lose their jobs or have their salaries cut, further worsening current direct care worker shortages.
- Medicaid spending is not out of control. Medicaid costs per beneficiary are much lower than for private insurance and have been growing more slowly than under private employer coverage.
The Age Tax Dramatically Increases Costs for Older Adults
The AHCA also would dramatically increase costs and make coverage less available for older adults aged 50-64 who are not yet eligible for Medicare by imposing an Age Tax that would allow insurance companies to charge older adults five times or more what younger adults pay for health insurance premiums in the individual market. The bill would significantly reduce tax credits that help lower and modest income older adults pay for coverage.
In addition, the AHCA provides for state waivers that would allow insurance companies to charge people with pre-existing conditions significantly higher rates based on their health. This will result in a less healthy population going into Medicare and higher program costs.
Taken together, the bill’s changes to age rating and tax credits will dramatically increase the financial burden of older Americans and make coverage significantly less affordable, especially for those with modest incomes, and likely will cause many to go without coverage and necessary care.
According to the recent CBO cost estimate, the AHCA would increase premiums by a shocking $14,400 per year—from $1,700 to $16,100 for a 64-year-old with income below $26,500 per year.
The AHCA also would harm older Americans with chronic conditions because it would allow states to let insurance companies significantly increase premiums for those with pre-existing conditions. Nearly half of Americans aged 50-64 have a pre-existing condition for which they could have been denied coverage prior to the ACA.
In summary, we join the coalition in strongly urging the U.S. Senate to oppose all of these harmful proposals, which would dramatically impact the health and long-term care of millions of older Americans and their families.
Read the full text of the joint letter to Majority Leader McConnell and Minority Leader Schumer.
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