What Will The American Health Care Act Mean For Low-Income Seniors?

The GOP’s latest health bill is under some scrutiny after a Florida Democrat made comments saying outright that the bill would result in insurance rate spikes for seniors who are already struggling under fixed incomes that won’t rise any higher. That’s a lofty statement that, if true, would mean terrifying changes are about to hit seniors hard. But therein lies the question: will the American Health Care Act really lead to the 800% premium spike that some analysts have predicted? Here’s the truth behind it.

According to a review of the American Health Care Act done by the Congressional Budget Office (CBO), a nonpartisan investigative committee, comments regarding premium increases are probably intended to mislead constituents who might otherwise support the Republican bill. For example, seniors on Medicare would not face the same rate increases as others who buy their insurance through the individual marketplace.

Even so, the demographic most adversely affected by the new bill’s resulting premiums would be consumers who are older and low-income. In order to better analyze the consequences of the bill, the CBO compared them with those of the Affordable Care Act (ACA or Obamacare) by the year 2026.

One of the reasons this analysis is so difficult, and the end result is so hard to predict, is because the Republican bill allows states more than one option for providing health benefits. States can get waivers for some health benefits.

Here’s what that means in terms of overall cost (with or without the waiver the rate goes up exponentially). The CBO found that under the ACA, a 64-year-old retiree earning $26,500 annually would have a $1,700 premium after subsidies factored into the cost. If a state were to pass up waiving away certain health benefits under a new law, the premium would blow up to $16,100 (847% rise). If waivers are accepted by the states, it would be $13,600 (a 700% rise).

Those premium rates are far too high for all older Americans to hold onto their insurance, which in turn means even higher rates for everyone. Insurance only works if everyone can buy in.

That said, it’s expected that the sick or senior citizens will pay more because they are more likely to become ill. That’s why current laws allow them to pay up to three times more as healthier, younger individuals. The American Health Care Act would create a much more lopsided dynamic by blowing that gap wide open–forcing seniors to pay up to five times more instead.

Meanwhile, seniors who have more money, to begin with (say, a 64-year-old practicing family law with $68,500 annually) would only see a 5% or 11% increase in their premiums.

These estimates and analyses are based on averages, and not absolutes. Depending on the state, county, and demographics or where you live, you might see premiums somewhat higher or lower. There are no guarantees. The only thing that the CBO is certain of is this: under the ACA, premiums will go up at much more manageable rates than they will under the Republican-led plan. Of course, it might not matter. The GOP-dominated government has still managed to fail again and again to even repeal Obamacare, much less replace it with something they can plausibly sell as “better.” We’re waiting.

Melissa Thompson
Melissa Thompson writes about a wide range of topics, revealing interesting things we didn't know before. She is a freelance USA Today producer, and a Technorati contributor.