March 7, 2017, Washington, DC – Last night House Republicans presented a bill to repeal the Affordable Care Act (ACA) and cut Medicaid payments to states. While the new bill, “America Health Care Act” (AHCA) lacks either an estimate of how many people will lose their health insurance coverage as a result of the bill or how much it will cost, House committees plan to mark up the bill as early as tomorrow – mere hours after the bill was introduced. Instead of providing meaningful improvement to ACA, the new bill represents a regression to the less secure, pre-ACA health insurance environment.
The proposed bill would dismantle key structural supports of ACA, including eliminating the employer coverage mandate and the individual mandate to obtain health coverage, and instead would impose a 30% penalty for lapses in coverage. Instead of the ACA’s subsidies that make health coverage more affordable for millions, the new legislation would offer age-based tax credits ranging from about $2,000 to $4,000 – likely insufficient to pay for meaningful insurance coverage.
The proposed AHCA would also gut key financing mechanisms of the Affordable Care Act that would amount to tax cuts for the wealthy – by some estimates, by hundreds of billions of dollars. “Regrettably, these tax cuts include provisions that would jeopardize Medicare’s financial stability,” says Judith Stein, executive director of the Center for Medicare Advocacy. “We fear such cuts will lead to renewed calls to ‘save’ Medicare by privatizing it for future generations,” Stein continued.
Older Americans needing health insurance coverage before becoming eligible for Medicare would also be hurt by the proposed AHCA. The ACA’s protection of older adults that prevents insurance companies from charging no more than three times the premium amount charged of younger individuals (a 3:1 ratio) would be replaced by a 5:1 ratio – dramatically increasing the amount insurance companies can charge older adults.
The bill would also phase out ACA’s expansion of Medicaid starting in 2020. Most devastatingly, it would structurally reform virtually the entire Medicaid program (including Medicaid expansion) by capping federal Medicaid payments to each state to a limited, preset amount per person (often referred to as a “Per Capita Cap”). This change would substantially reduce federal funding for Medicaid, a key safety net program. It will shift costs to states, inevitably resulting in cuts to services, eligibility and provider payments – and to fewer people obtaining Medicaid and quality services. These changes will disproportionately harm children and the elderly, the main recipients of Medicaid support.
The Affordable Care Act expanded health insurance coverage for tens of millions of Americans. We cannot accept the AHCA plan, which would strip away existing health care and jeopardize Medicare, Medicaid and the states. The AHCA repeal plan would take us back to the time when families all over the country lacked insurance.
The Center for Medicare Advocacy, Inc., established in 1986, is a national nonprofit, nonpartisan law organization that provides education, advocacy, analysis and legal assistance to help older people and people with disabilities obtain fair access to Medicare and quality health care. We focus on the needs of Medicare beneficiaries, people with chronic conditions, and those in need of long-term care. The organization is involved in writing, education, and advocacy of importance to Medicare beneficiaries nationwide. The Center is headquartered in Connecticut and Washington, DC, with offices throughout the country.