Policy, Payers

Repeal and replace turns to ‘fixing’ Obamacare as AARP rattles sabers

There’s long been an unwritten rule in Washington: Don’t piss off seniors, because they vote in higher percentages than younger demographics.

culture change in nursing homes

There’s long been an unwritten rule in Washington: Don’t piss off seniors, because they vote in higher percentages than younger demographics. That’s why Congress historically has been careful about touching Medicare and Social Security.

With Medicare, there has only been one major piece of legislation in each of the last three presidencies. In 1997, the Balanced Budget Amendment created the Children’s Health Insurance Program and cut Medicare payments to physicians — though last-minute “fixes” rolling back the cuts passed almost annually. In 2003 came the Medicare Prescription Drug, Improvement and Modernization Act, and with it, the Part D drug benefit.

And then, of course, 2010 brought the Patient Protection and Affordable Care Act, commonly known as Obamacare.

Republicans, including new President Donald Trump, campaigned hard on the promise of repealing and replacing the ACA, but now that they control both the executive and legislative branches, they seem to be getting cold feet. Something about the prospect of 20 million people losing health insurance, perhaps?

This week, numerous news outlets reported that GOP legislators are changing their rhetoric from “repeal and replace” to making fixes to the mechanisms already in place.

“There are some of these provisions in the law that probably will stay, or we may modify them, but we’re going to fix things, we’re going to repair things,” House Energy and Commerce Committee Chairman Greg Walden (R-Oregon) said, according to The Hill.

Sen. Lamar Alexander also used the word “repair” this week.

Perhaps that is because the senior lobby — led by the AARP — finally started making noise about several aspects of the GOP platform. Specifically, the group is concerned about ideas that have been circulating to turn Medicare into a voucher program and to loosen “age rating” restrictions, allowing insurers to charge those not quite old enough for Medicare significantly higher rates than younger people.

Currently, the ACA prohibits payers from setting premiums for those aged 50-64 more than three times what they charge young adults. One bill under consideration would raise the maximum age-band disparity to 5:1.

From a letter AARP sent Wednesday to leadership of the House Energy and Commerce Committee’s Subcommittee on Health:

Weakening or eliminating the 3:1 age band restriction would increase dramatically premiums for older adults, making coverage less affordable for 50-64 year olds. Meanwhile, such a change would provide only marginally lower costs for younger adults. Estimates show that changing the age rating limit to 5:1 would increase yearly premiums for an average 64 year old on a silver plan by $2,100 (from $8,500 to $10,600), while reducing premiums for a 21 year old by only $700 (from $2,800 to $2,100).

The even larger disparity created by a 5:1 age band fails to take into account the impact on affordability for seniors. Income analysis done prior to implementation of the ACA found that the median family income for uninsured 18-24 year olds was approximately $28,500 while it was about $30,000 for 50-64 year olds — a difference of just over $1,500. Despite the small difference in income, seniors who already pay as much as $5,000 or more would be asked to pay as much as $8,000 more.

A September 2015 Commonwealth Fund analysis also found that such a change would result in 400,000 older Americans losing health coverage altogether. The study also found that the increase in premiums caused by 5-to-1 rate banding would be financed in large part by the federal government — if the coverage is more expensive, it will necessitate higher subsidies to ensure affordability.

The AARP also unveiled a new advertising campaign aimed at holding Trump to his campaign promise to “protect and save your Social Security and your Medicare.”

The organization claims close to 38 million members. That’s a lot of people to have turn against you, especially when they vote.

Photo: Flickr user Frank Hebbert