May 25, 2017 – WASHINGTON, DC. – Health care coverage through the Affordable Care Act (ACA), Medicare and Medicaid is under assault. The Congressional Budget Office finally released its estimate regarding the devastating impact of the AHCA bill that passed the House earlier this month. Now a select group of Senators is considering its own version of AHCA, also seeking to repeal the Affordable Care Act. Meanwhile, the Trump Administration released a proposed budget that would all but destroy Medicaid. And the Justice Department delayed action in a lawsuit important to the future of Affordable Care Act, further undermining the ACA marketplace. Individually and collectively, these actions jeopardize health coverage and care for millions of Americans.
Legislation to Repeal and Replace the Affordable Care Act
The American Health Care Act (AHCA), passed by the House by 4 votes on May 4th, is now moved to the Senate for consideration. As the Center for Medicare Advocacy has discussed elsewhere, if enacted, AHCA would roll back consumer protections in the Affordable Care Act (ACA), dramatically increase the number of uninsured individuals, significantly increase costs for older adults age 50-64, undermine Medicare’s finances, and gut the Medicaid program. In sum, this so-called health care bill would put millions of people at risk and greatly diminish health coverage and access to care. Meanwhile, the Senate is taking a similar secretive approach to that followed in the House – developing a bill behind closed doors, with no public hearings – a process that is drawing criticism, including from Republican senators.
The AHCA goes way beyond the scope of repealing ACA, including decimating the Medicaid program through draconian cuts (over $800 billion) and dangerous restructuring. As the Center on Budget and Policy Priorities (CBPP) states, AHCA would end Medicaid as we know it, and “would have a devastating impact on health care for over 70 million people who rely on Medicaid, including over 30 million children and millions of seniors, people with disabilities, pregnant women, and low-income adults.”
Recent reports by the Kaiser Family Foundation and the Commonwealth Fund focus on AHCA’s potential impact on the 11 million older and disabled Medicare beneficiaries who are also eligible for Medicaid (dual eligibles). As the Commonwealth Fund notes, one-third of all Medicaid spending is for people also covered by Medicare, but much of this spending is “optional” for states, for services such as long-term services and supports, and behavioral health care. The Medicaid spending caps imposed by AHCA would greatly strain state Medicaid funds, putting greater pressure on them to cut Medicaid-covered services, including for dual eligibles. As the Commonwealth Fund notes, the AHCA cap on Medicaid funding would also negatively impact Medicare and Medicare beneficiaries, as the programs are closely connected.
Updated CBO Score
The House passed AHCA without an updated score from the nonpartisan Congressional Budget Office (CBO). The CBO predicts the estimated cost and impact of legislation, without this the Senate cannot formally consider a bill. Yesterday, the CBO released its updated score of AHCA, which projects that 14 million people would lose their health insurance next year; 23 million would lose their health insurance by 2026 (slightly less than the previous estimate). In 10 years, the total number of uninsured in the country – an estimated 51 million people – will approach the number of uninsured prior to the passage of the Affordable Care Act. An estimated $834 billion would be cut from Medicaid over 10 years. 14 million of the people who would become uninsured are people who currently have Medicaid.
Older adults would fare poorly under AHCA. According to a New York Times analysis of the CBO report, “the increase in the number of uninsured would be disproportionately larger among older people with low incomes.” This would be due, in large part, because insurance would become unaffordable for many older adults who are not yet eligible for Medicare. As noted by The Hill, “[p]remiums could rise as much as 800% for a 64-year-old making $26,500, the CBO found — from $1,700 to $13,600.”
In short, millions of people are projected to lose their insurance coverage, there will be deep cuts to Medicaid, and there will be greatly increased premiums and out-of-pocket expenses for millions more. As suggested by the Center on Budget and Policy Priorities, rather than compare this newest CBO score for the AHCA bill passed by the House to the previous score, the relevant question is how does AHCA’s projected impact compare to current law, if the ACA were left intact? By any measure, provisions of this bill would reverse all of the historic coverage gains achieved by the ACA.
Trump Administration’s Proposed Budget
As discussed in the Center’s CMA Alert, earlier this week the Trump Administration released its proposed FY2018 federal budget entitled “A New Foundation for American Greatness.” If enacted, this budget would have a wide-ranging and devastating impact on the nation’s safety net programs, including Medicaid.
With respect to health care, the budget assumes the massive cuts to Medicaid in the House-passed American Health Care Act (AHCA) are enacted into law, and then adds to those cuts, for a total of almost $1.3 trillion in Medicaid cuts over 10 years. These devastating Medicaid cuts undermine the purported goal of AHCA proponents – namely that the Medicaid per capita caps set by the AHCA are designed to promote state flexibility and improve care to those enrolled in Medicaid. These draconian cuts expose the truth: The objective of the per capita caps is to provide a mechanism for essentially eliminating the Medicaid program, disregarding the pain, suffering and possible deaths that will result. The cuts will ravage low-income seniors, people with disabilities and their families, who are already struggling to stretch very modest incomes to cover food, medications, and other essential needs.
Although the Trump budget purports to leave Medicare alone, it would greatly impact Medicare and Medicare beneficiaries:
- As discussed above, the impact on individuals dually eligible for both Medicare and Medicaid would be even more severe than the changes contemplated in the AHCA bill alone.
- The budget completely eliminates federal funding (roughly $52 million nationwide) for State Health Insurance and Assistance Programs (SHIPs) – the only national program of its kind that provides free, unbiased support to Medicare beneficiaries to navigate the complexities of enrolling in Medicare and ensure that beneficiaries obtain access to the benefits for which they are eligible, such as low-income cost-sharing assistance.
- The proposed budget cuts over $74 billion from Social Security’s programs, including Social Security Old-Age, Survivors’, and Disability Insurance as well as Supplemental Security Income. This includes up to $64 billion in cuts to Social Security Disability Insurance (SSDI) expenditures. The cuts to SSDI could end the ability of some individuals under age 65 who have significant disabilities to qualify for Medicare coverage. In other words, some people who qualify now could lose Medicare coverage.
- The budget would also make changes to Medicare appeals, making it even harder for beneficiaries to access needed coverage and care. One recommendation in the budget calls for eliminating the right to a hearing in instances where “no material facts are in dispute.” This would remove the right to a hearing for a broad range of coverage cases and would fundamentally harm an individual’s opportunity to plead his or her case, including when decision-makers are wrong about the law.
As Judith Stein, the Center for Medicare Advocacy’s founder and Executive Director, states, “Despite misleading statements to the contrary, this budget greatly impacts Medicare and Medicare beneficiaries. Make no mistake, the budget would reduce access to Medicare, health care, and cause real pain for older people, people with disabilities, and families throughout the country.”
Sabotage of the Affordable Care Act
In addition to the current legislative and budget debates, the Affordable Care Act (ACA) is being purposely weakened by on-going sabotage. For example, in 2014 House Republicans filed a lawsuit challenging the Obama Administration’s authority to pay the cost-sharing subsidies under the ACA (House v. Burwell, now House v. Price; for more information, see, e.g., Families USA website). The Obama Administration Justice Department defended against this challenge to ACA.
Given President Trump’s repeated threats to repeal the ACA, there has been lingering uncertainty over whether his Administration would continue to defend the suit. If it chooses not to do so, the cost-sharing subsidies would be threatened, undermining insurance coverage available through the ACA Exchanges.
On May 22, 2017, the Administration faced a court deadline concerning the case, but instead of taking a firm position, the Administration asked for a 90-day stay in order to delay taking such a position.
According to Families USA,
This delay comes at the worst possible time as insurers file for 2018 Marketplace rates, and continues to create uncertainty regarding the future of core elements of the Affordable Care Act (ACA). Insurers continue to warn that this uncertainty will force them to drastically raise premiums or leave the markets altogether.
Further, as noted by the Commonwealth Fund, “[t]his is just one example of the continued uncertainty over critical ACA policies that is making it difficult for insurers to submit their proposed plans and rates.” In addition to the uncertainty surrounding cost-sharing subsidies, questions remain about the Administration’s enforcement of the individual mandate and commitment to outreach during the next open enrollment period, all of which undermine states’ ability to conduct timely rate reviews, and will likely lead insurers to “respond with significant price increases for 2018.”
As noted by Robert Pear of the New York Times, “[o]pponents of President Barack Obama’s signature legislative achievement have made what may be a self-fulfilling prophecy: They repeatedly forecast the collapse of the health law, and then push it along.”
Conclusion: This is Why We Fight
The Center for Medicare Advocacy frequently hears from people who have benefited from ACA, Medicare and Medicaid, and who would be greatly harmed if the proposed changes to these programs move forward. For example, we recently heard from Mr. S from Connecticut, who shared his story:
I suffer from the motor form of an autoimmune disorder called chronic inflammatory Demyelinating Polyneuropathy (CIDP). The treatment for this involves bi-monthly six-hour infusions of IVIG (Gammaguard). In April 2010 after approximately two years of infusions, I was informed by my insurance company that I had reached my lifetime maximum [coverage limit] and that they would no longer pay for my treatment. Two appeals to [my insurance company] and one to the State of Connecticut Insurance Department failed to reverse this decision. After a few months with no infusions, I started to go into a rapid health decline. The only thing that ultimately saved me was the ACA’s elimination of lifetime limits that went into effect in January 2011. I fear that the proposed repeal and replacement of the ACA will have devastating effects on my ability to maintain these medically necessary infusions and dramatically impact my life…
As the Center has often written, this Administration and Congressional leaders have promised to repeal and “replace” the Affordable Care Act. They also plan to gut the Medicaid program by cutting it by trillions of dollars and restructuring it into block grants or per-capita caps. Further, Speaker Ryan, HHS Secretary Price, and many in Congress want to privatize Medicare by turning it into a voucher program.
“These are not isolated threats to be analyzed in silos and defended against individually,” says Center for Medicare Advocacy Executive Director, Judith Stein, “These proposals comprise a collective threat to health coverage and care for millions of Americans, particularly older people, people with disabilities – and children. The Center for Medicare Advocacy is committed to protecting the health and well-being of people in need and to fighting threats to Medicare, Medicaid, the Affordable Care Act – and basic American values.
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The Center for Medicare Advocacy, Inc., established in 1986, is a national nonprofit, nonpartisan law organization that provides education, advocacy and legal assistance to help older people and people with disabilities obtain fair access to Medicare and quality health care. The Center is headquartered in Connecticut and Washington, DC with offices throughout the country.