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AARP Opposes GOP Healthcare Plan — Here's Why

AARP Opposes GOP Healthcare Plan — Here's Why

By    |   Saturday, 11 March 2017 05:59 PM

AARP came out strongly against the plan by House Republicans to repeal and replace Obamacare hours after it was proposed on Tuesday, spurring opposition by a number of healthcare industry and nursing groups.

"AARP opposes this legislation as introduced that would weaken Medicare, leaving the door open to a voucher program that shifts costs and risks to seniors," Executive Vice President Nancy LeaMond said.

"Before people even reach retirement age, big insurance companies would be allowed to charge them an age tax that adds up to thousands of dollars more per year," she said. "Older Americans need affordable health care services and prescriptions.

"This plan goes in the opposite direction, increasing insurance premiums for older Americans and not doing anything to lower drug costs."

The Republican plan, known as the American Health Care Act, would repeal Obamacare's individual coverage mandate and replace it with a penalty for allowing coverage to lapse.

It also would end fines on people who do not carry health insurance — and the proposal is expected to cover fewer than the 20 million people insured under President Barack Obama's original plan.

President Donald Trump has endorsed the plan, while conservative Republicans have introduced competing proposals in both the House and Seante.

AARP, with nearly 38 million members, slammed the Republican plan as a "special-interest healthcare bill" and outlined its opposition in a letter to top congressional leaders on Tuesday.

The association stands against the GOP plan because it would:

Repeal a 0.9 percent payroll tax on higher-income individuals that would be used to cover Medicare costs.

The move would make the primary Medicare trust fund insolvent four years earlier than is currently estimated.

According to a 2016 report by Medicare's trustees, the Part A fund is currently solvent through 2028. That is 11 years longer than before the Affordable Care Act took was signed in 2010.

"Repealing this provision could hasten the insolvency of Medicare by up to four years and diminish Medicare’s ability to pay for services in the future," AARP said.

End fees imposed on makers and importers of brand-name prescription drugs used by Medicare patients.

The fees are expected to add $25 billion to the Medicare Part B trust fund between this year and 2026, AARP said.

"Older Americans use prescription drugs more than any other segment of the U.S. population, typically on a chronic basis," the group said.

Protections under Obamacare have allowed more than 11.8 million Medicare recipients to "save more than $26.8 billion on prescription drugs.

"AARP believes Congress must do more to reduce the burden of high prescription drug costs on consumers and taxpayers."

Change the formulas used to calculate tax credits — based on age, income and premium levels — that would be given to Americans to buy insurance on the open market or through exchanges, resulting in lower subsidies.

The Republican plan would increase the difference in premiums between younger and older Americans by replacing the current 3:1 ratio under Obamacare to 5:1.

States, however, would be allowed to establish their own guidelines.

The ratio change increases costs to older people, while lowering expenses for younger Americans — creating an incentive to buy insurance.

Obamacare was built on the premise that large numbers of young and healthy people would sign up for healthcare to help cover the medical costs of older and less-abled consumers.

With the ratio change, "older enrollees could be charged up to five times as much as younger enrollees," AARP said, which said it amounted to "an unaffordable age tax."

In addition, the re-calculating of subsidies based on income and premium levels will bring a "flatter tax credit."

Regarding income, for instance, those earning less than $75,000 a year in modified adjusted gross income would get the same, fixed amount of subsidies for their age groups.

That starts at $2,000 a year for those under 30, increasing in $500 increments per decade in age, up to $4,000 a year for those who are 60 and older.

However, the tax credits are capped at $14,000 per family, regardless, using the five oldest family members to calculate the amount.

"The change in structure will dramatically increase premiums for older consumers," including as much as $8,400 a year for some seniors.

Eliminate subsidies that would help lower costs for copays and other out-of-pocket expenses.

Those would end in 2020 under AHCA, but the bill sets up a Patient and State Stability Fund, which would receive $100 billion over nine years with state matching requirements.

The dollars could be used for different purposes, including lowering out-of-pocket costs of a particular state's residents.

"Out-of-pocket costs could significantly increase under the bill with the elimination of cost-sharing assistance" under the Affordable Care Act, AARP said.

"The cost-sharing assistance has provided relief on out-of-pocket costs for low-income individuals, who are some of the most financially vulnerable marketplace participants."

Gradually phase out Medicaid expansion.

Before Obamacare, Medicaid was only available certain low-income families, pregnant women, children and the disabled.

The Affordable Care Act expanded eligibility to all individuals under age 65 who earn up to 138 percent of the federal poverty level, or about $16,643 a year for an individual in states that agreed to the expansion.

Thirty-one states and Washington, D.C., have so far opted in to the expansion, which brings more federal aid.

More than 11 million newly eligible adults had enrolled in Medicaid through March 2016, according to an analysis by the Kaiser Family Foundation of data from the Centers for Medicare and Medicaid Services.

However, AHCA would bar new enrollment under the Medicaid expansion after Dec. 31, 2019. States that have not yet opted in to the expansion also will not be able to do so after that date.

The proposal does not eliminate the Medicaid expansion coverage for those who are enrolled before 2020 — but if they have a break in coverage for more than one month after the 2019 date, they cannot re-enroll in the expanded program.

"Medicaid is a vital safety net and intergenerational lifeline for millions of individuals, including over 17.4 million low-income seniors and children and adults with disabilities who rely on the program for critical healthcare and long-term services and supports," AARP said.

Limit the amount of federal funding states can receive per each person enrolled in Medicaid.

Under Obamacare, the federal government guarantees matching funds to states for qualified Medicaid expenses, regardless of cost.

The change would vary in amounts to each category of American enrolled in Medicaid — for instance, children, the blind and the disabled.

"This approach to financing would likely result in overwhelming cost shifts to states, state taxpayers, and families unable to shoulder the costs of care without sufficient federal support," AARP said.

"This would result in cuts to program eligibility, services, or both – ultimately harming some of our nation's most vulnerable citizens."

The organization also expressed concern that the limits would not "accurately reflect the cost of care for individuals in each state, including for children and adults with disabilities and seniors, especially those living with the most severe disabling conditions."

Repeal a 6 percent federal incentive to states who participate in the Community First Choice Option in its Medicaid program.

Obamacare established the incentive to encourage states to develop programs that would move Medicaid recipients from nursing homes and other institutions.

States receive the reward by providing Medicaid programs that "help older adults and people with disabilities live in their homes and communities where they want to be," AARP said.

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AARP came out strongly against the plan by House Republicans to repeal and replace Obamacare hours after it was proposed on Tuesday, spurring opposition by a number of healthcare industry and nursing...
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