Editor’s Note: Journalist Philip Moeller is here to provide the answers you need on aging and retirement. His weekly column, “Ask Phil,” aims to help older Americans and their families by answering their health care and financial questions. Phil is the author of the new book, “Get What’s Yours for Medicare,” and co-author of “Get What’s Yours: The Revised Secrets to Maxing Out Your Social Security.” Send your questions to Phil.
Answering your questions is the singular mission of this column. This week, however, doing only this seems akin to fiddling while Rome burns. As far as the nation’s health care is concerned, there is an enormous elephant in the room — and it really is a pachyderm, or at least the political equivalent.
Starting with the Republican-controlled U.S. House’s passage of American Health Care Act — a measure that even President Trump called “mean” — the Republican-controlled U.S. Senate came up with the Better Care Reconciliation Act.
This still-evolving measure would about match the House bill in the numbers of people it would cause to lose health insurance. It also would dramatically reduce health care for the nation’s most vulnerable citizens and cut taxes for wealthier Americans. In the process, it would substantially raise the cost of health insurance and, in a neat feat of legislative wizardry, simultaneously reduce the quality of the health policies such premiums would purchase.
These are just the headlines of what the Better Care Reconciliation Act would do. It also would give states relatively free rein to create their own waivers from the law, possibly leading to insurers being able to exclude people with pre-existing conditions from affording coverage. Older people still shy of the Medicare eligibility age of 65 now have some protection against being charged higher, age-based premiums. But they would lose this protection, allowing insurers to charge them up to five times more for the same coverage than younger persons are charged.
This bill was crafted in private, has had no public hearings and had been seen by only a few senators until late last week. Virtually every major group of health care providers has come out against the bill, as they did for the House-passed bill. Opposition from within his own party finally forced Senate Majority leader Mitch McConnell to postpone a vote on the measure that had been planned for this week.
That decision owed much to the Congressional Budget Office’s analysis of the bill, released Monday. It projected it would lead to 22 million Americans losing their health insurance over the coming decade — about the same as its assessment that 23 million would lose coverage under the House bill.
Beyond this similarity, the Senate bill would reshape Obamacare subsidies and cause up-front deductibles to soar, making insurance unaffordable to most lower-income Americans. On paper, people would have the freedom to buy whatever policy they wished. In practice, the CBO said, “few low-income people would purchase any plan.”
A hurried addition to the bill would penalize people who don’t have insurance for a two-month period by forcing them to wait six months before they could get a policy. There was no evidence that the possible impact of this measure was considered before its inclusion.
The CBO report, while criticized by the White House as inaccurate, seems to have provided the political cover being sought by several Senate Republicans to take more time to evaluate a measure they confess they do not fully understand. Given that these bills would reshape one sixth of the U.S. economy, taking a time out would be in the nation’s interest.
Still, opponents of the House and Senate bills know that this Congress is quite capable of moving ahead with even a deeply flawed effort, so long as it allows them to say they have fulfilled their seven-year campaign to overturn Obamacare. After next week’s July 4 holiday recess, they expect to see McConnell back at work trying to craft changes to the bill that will get 50 GOP senators to “yes.”
Impact on older Americans
Getting rid of Obamacare is the ostensible reason for the Republicans’ efforts. But I suppose that when you’re having so much fun tearing down things, the temptation to continue must be overpowering. These bills would also make major changes to Medicare and Medicaid. The cumulative effect on older Americans would be nothing short of devastating.
First, older Americans who have not yet reached the normal Medicare eligibility age of 65 would face sharply higher insurance rates on whatever is left of the Obamacare state insurance exchanges. Private health insurers would be able to charge them higher rates than at present. The subsidies now available for Obamacare policies would be sharply smaller for most people, and policy deductibles would be much, much higher.
Second, for the more than 55 million people now on Medicare, the Senate and House measures have less direct but nonetheless ominous impacts. These would be triggered by the repeal of Obamacare’s high-earner taxes on Medicare. Cutting these taxes plays to the Republican base, of course, but to do so at the same time as costs are being increased for lower-income Americans is tone deaf and has little economic rationale. The 400 richest families in the nation, it is estimated, would receive $2.8 billion a year from these tax cuts — an amount equal to the annual Obamacare premium subsidies for nearly 800,000 persons.
When Obamacare was enacted in 2010, these new Medicare taxes added several years to the life of Medicare’s trust fund, which is dedicated to paying insured hospital expenses under Part A of Medicare. Their elimination would have the opposite effect, and the prospect of this fund running out of money has been highlighted by Republican leaders as a compelling reason for making more fundamental changes to the program.
Third, the House and Senate measures both would reduce future Medicaid spending by nearly $800 billion over the coming 10 years. This represents a spending cut of more than 25 percent compared with current projections. State governments pay substantial shares of Medicaid, and the Senate bill in particular would give them more local control over how Medicaid dollars are spent.
This would include letting them apply for waivers to not only reduce their spending but cut the things that Medicaid covers in their states. Medicaid also pays for low-income Medicare subsidies, so these supports also could be threatened by the GOP bills.
As of April, more than 74.5 million people were receiving Medicaid. Here’s a very helpful graphic snapshot from The New York Times of who these people are. If you want more facts on the impact of these bills, the Kaiser Family Foundation has produced a series of excellent reports. If you take the time to do additional homework, it will become clear that changing our health care rules is an enormously complicated endeavor. Doing it on the fly is not defensible.
Medicaid once was thought of as health care for children and poor people. It certainly is that, but it also is a crucial benefit program for middle-class retirees. Most of the 1.4 million residents of nursing homes are only able to afford them because Medicaid pays for their long-term care. Many people mistakenly believe Medicare pays for long-term care, but it does not. Cutting Medicaid funding for such care now is particularly worrisome, as waves of aging boomers approach their 80s and almost certainly will place added burdens on nursing homes.
Time for some sunlight
Surely, this is not how a democracy should conduct the public’s business. Surely, we won’t approve a measure that would deny health insurance — and probably care — to millions of the nation’s less fortunate citizens. Surely, we won’t cut taxes on the wealthy to reduce Medicare funding. Surely, we won’t approve massive cuts to Medicaid. All without so much as even a single public hearing? Yet, here we are.
Obamacare, by contrast, included so many public hearings that even its most ardent supporters had had enough by the time it was voted into law.
Fundamentally changing the government’s role in providing health care to Americans is, I believe, unavoidable. But it should be done in a deliberative and publicly transparent fashion, not in secret. And if it is going to have any permanence, it should be a bipartisan effort.