For older Americans, Medicaid and the Affordable Care Act (ACA) provide a critical lifeline for needed health care. Approximately 6 million adults over age 65 receive Medicaid, an additional two million adults aged 55-64 gained insurance through the ACA. Without these programs, health care for many older adults would be out of reach.
Republican health care proposals like the so-called American Health Care Act (AHCA) will destroy this safety net and will gut Medicaid by more than $830 billion.
As Baby Boomers Age, Medicaid Caps Will Deepen Cuts
Medicaid per capita caps as proposed in AHCA provide for the same rate of growth per individual for all beneficiaries 65 and older, whether they are 66 or 86. A 66 year old, however, will not need the same health care as an 86 year old. In fact, in 2011, seniors aged 85 and older incurred Medicaid costs that were, on average, more than 2.5 times higher than those aged 65 to 74. “Baby boomers,” who started turning 65 in 2011, are causing the U.S. population to age. As these boomers progress into their 80s and 90s, the cost of their care will rise while the rate of growth under Medicaid caps (and therefore the funds allotted to states) will stay the same. AHCA’s Medicaid caps do not compensate for the needs of our aging population. Instead, caps will make already severe cuts even deeper, forcing states to further cut services, provider rates, and/or eligibility.
As “baby boomers” age and U.S demographics skew older, their costs will outpace funding, forcing more cuts in Medicaid beyond the massive ones already predicted.
Medicaid Caps Threaten Community-Based Services
Medicaid is the primary funder of long term supports and services for older Americans, including both nursing facility care and home and community-based services (“HCBS”). Medicaid covers 6 out of 10 nursing facility residents, and is one of the only funders of HCBS. Home based services, including help with bathing, dressing, eating, and other activities of daily living, are generally less expensive than nursing facility care. However, because Medicaid coverage of many home-based services is optional, while nursing facility coverage is mandatory, states facing massive shortfalls will likely target HCBS for severe cuts. Cutting HCBS will force older individuals into institutions, violating their right to live in the community and undermining decades of state and federal initiatives to rebalance Medicaid spending towards community-based care.
The “Young-Elderly” Will No Longer Be Able to Afford Insurance
Republican proposals will send insurance premiums skyrocketing for adults aged 55-64. Under AHCA, insurers can charge at least five times more for premiums for older American than for younger ones, but the size of tax credits to help pay those premiums will shrink. Republicans are also proposing flat credits—that is, credits that do not adjust based on need. A rich person with a low premium will get the same help as a poor person with a high premium.
The harm caused by these changes is stunning: The CBO estimates that in some states, the out-of-pocket costs for insurance for a 64 year old with an annual income of $26,500 (175% FPL) could rise from $1,700 to $16,100: a whopping 750 percent increase.
Some older adults will fare even worse. For example, a 60 year-old living in Northeastern rural Maine and earning $20,000 per year could see her out-of-pocket insurance premium skyrocket from $960 a year to $17,090. Under AHCA, insurance premiums would encompass 85 percent of her income, and her premiums would spike 1,680 percent. Under the guise of “fixing” the ACA, Republicans will make health insurance completely unaffordable.
Under Republican proposals, Medicaid funding will not keep pace with the growing needs of our aging population, community services will be slashed, and premiums will skyrocket. Older Americans have much to lose if Republicans succeed; we must continue to defend Medicaid and the ACA. For more information, see NHeLP’s issue brief #3 in the Protect Medicaid series: Older Adults and Individuals with Disabilities. Call your senators and urge them to vote against the AHCA.