Straight Talk for Seniors®: The House Affordable Care Act Repeal and Replace Bill
This post was updated on March 21 to reflect an amendment introduced late on March 20.
The full House of Representatives may vote as soon as March 23 on a bill to repeal and replace provisions of the Affordable Care Act (ACA)—and the outcome will affect millions of older Americans, especially those who are most vulnerable.
While the bill would impact people of all ages, it would have a significant effect on older adults aged 65+ who depend on Medicaid and people aged 55-64 who do not yet qualify for Medicare and must buy their own health insurance.
First, the good news. The bill does not eliminate the ACA’s annual Medicare wellness visit, preventive screenings, or prescription drug “donut hole” coverage provisions. This means people with Medicare would still get help paying for prescriptions and preventive care without a copay.
The ACA also raised the tax deduction threshold for medical expenses from 7.5% of adjusted gross income to 10% in 2016 for individuals aged 65+. The House bill would restore the lower 7.5% threshold in 2018, which NCOA supports. The March 20 amendment would go even further—reducing the threshold to 5.8% of income.
But other provisions in the bill could be devastating for older adults with low and moderate incomes. Here’s why:
The bill cuts Medicaid by $880 billion over 10 years.
Medicaid is a lifeline for 7 million vulnerable older adults who depend on it, primarily for long-term services and supports that are not covered by Medicare. The nonpartisan Congressional Budget Office (CBO) estimates that the repeal bill would cut Medicaid by $880 billion and remove 14 million people from the program by 2026.
The bill would fundamentally change how Medicaid is funded. For the past 50+ years, the federal government has paid a percentage of states’ actual Medicaid costs from year to year. The House bill would cap that federal contribution based on a preset formula that would grow at a fixed rate, below the actual cost of care. This is called a per capita cap.
As the population ages and needs more expensive services, this strict cap will make it nearly impossible for states to keep up with the cost of care. This would likely lead them to cut back on coverage and services for people in need.
The March 20 amendment would allow states to receive federal Medicaid funding through a block grant instead of a per capita cap—but only for adults and children. Funding for older adults and people with disabilities would still be subject to per capita caps. To address concerns about rising costs for this population, the amendment would dial up the Medicaid capped growth rate from 3.7% to 4.7%.
The Medicaid cuts also mean less innovation and assistance for people who want to receive care in their homes and communities—which are optional services under Medicaid—instead of care in a nursing home, which is mandatory. Medicaid provides more than 3.2 million seniors and people with disabilities access to home and community-based services. One of the programs that provides incentives to states to provide these services is the Community First Choice program. Under the bill, the incentive would be repealed.
The House bill also would effectively end the ACA Medicaid expansion in 2020, which provides health security in 31 states to 11 million previously uninsured Americans, including about 1.5 million low-income older adults aged 55-64 who struggle to find affordable coverage. Under the March 20 amendment, beneficiaries who enroll in the Medicaid expansion prior to Dec. 31, 2019 would be “grandfathered” into the program.
The bill weakens the Medicare Part A Trust Fund.
The ACA tax provision that imposes a 0.9% payroll tax on incomes above $200,000 for single individuals and $250,000 for couples would be repealed under the House bill. This means that the Medicare Part A Trust Fund would be insolvent at least 3 years sooner—in about 2025 instead of 2028.
The bill allows insurance companies to charge older adults five times or more than younger adults.
Older adults also would face higher out-of-pocket costs under the proposed repeal bill. Under the ACA, insurers cannot charge pre-Medicare older adults with nongroup coverage premiums that are more than three times what they charge younger adults. That ratio would increase to five times or more under the House bill.
According to the CBO, that means a single 64-year-old with an income of $26,500 would have to pay $14,600 a year in premiums under the repeal bill, compared to $1,700 a year under the ACA. That’s an increase of more than 750%.
The March 20 amendment would give the Senate flexibility to potentially enhance the tax credit for people aged 50-64 who may need additional assistance paying for coverage.
The bill eliminates the Prevention and Public Health Fund.
The ACA created the Fund as a critical investment in public health and preventive services. For older adults, it includes funding for Chronic Disease Self-Management Education (CDSME) and Falls Prevention. But it also has improved access to disease prevention, vaccines, and health screenings for all Americans. The repeal bill eliminates the Fund entirely in October 2018.
The path ahead for the House ACA repeal bill is uncertain. The House is expected to vote on the bill this week.
If it passes, it will head to the Senate, where several Republican Senators have expressed serious reservations about the proposal as it now stands. Senate Republican leaders are hoping to pass the bill before a 2-week recess slated to begin April 10.
We need your help educating Senators about what the House proposal would mean for older Americans, particularly the Medicaid caps provision. Sign up for our advocacy alerts to get the latest news and take action when the time is right.