Experts worry about impact of proposed Obamacare replacement

March 19--Republican House leaders plan to vote next week on the American Health Care Act, a proposed bill to repeal and replace much of the Affordable Care Act, known as Obamacare. As Congress debates the legislation, experts worry about its possible effects on Frederick County's aging population.

"The affordability for people who are older will not be the same as under the Affordable Care Act, so older people will be dropping coverage," said Jeananne Sciabarra, the executive director for Consumer Health First, a Maryland-based advocacy group for health care reform. "Certainly, the costs are going to go up and the credits are going to go down."

The AHCA was introduced March 6. In a report on Monday, the Congressional Budget Office, a nonpartisan agency that evaluates the economic impact of new legislation estimated that 14 million more people would be uninsured by 2018 under the AHCA than under current health care law.

In 2026, 52 million people would be uninsured under the AHCA, while 28 million would be uninsured under Obamacare.

According to Tuvy Guss, a Frederick resident and former actuary for Coventry Health Care and Aetna, a significant number of those 52 million uninsured would be low-income people aged 50 to 64 -- a group that becomes more vulnerable under the proposed plan.

The CBO reports that by 2026, about 30 percent of people age 50 to 64, living on $30,300 a year or less, would be uninsured under the Republican bill. Less than 15 percent of people in that age and income bracket would be uninsured under Obamacare.

There are a number of reasons for the anticipated drop in coverage, Guss said. One key difference is how subsidies are distributed to health care purchasers on the individual market. Under Obamacare, tax credits were distributed based on a person's income and the cost of health care plans where that individual lives.

Under the proposed Republican plan, tax credits are fixed -- regardless of income -- and based on age. Buyers younger than 30 would get a $2,000 tax credit, with increases per decade of age. Buyers older than 60 would receive $4,000 -- much less than many received under Obamacare.

At the same time, the AHCA would change the so-called "age band rating," the range at which insurers can charge more to older consumers based on the greater costs of covering them. Under Obamacare, insurers could only charge older customers up to three times as much as their youngest consumers. Under the AHCA, insurers could charge them up to five times as much.

The bill's proposed changes to the age band rating, combined with changes to the tax credit system, would lead to significant changes in the cost of premiums for older, low-income adults, according to the CBO report.

Under current law, a 64-year-old making $26,500 per year would pay $1,700, after subsidies, for an individual health care plan.

Under the AHCA, the same 64-year-old would pay $14,600, according to the report.

"You can just look at what that person would be paying and say, 'OK, there's no way they can afford that,'" Guss said. "Older folks will stop getting coverage through this new mechanism and really, there wouldn't be anything else for them. Because unless you're even lower-income, you're not going to qualify for Medicaid, and you're not old enough to qualify for Medicare."

Even higher earners might drop health care coverage based on affordability, Guss added. According to the CBO report, a 64-year-old making $68,200 would also spend $14,600 on health care under the AHCA. That's $700 less than people would spend under Obamacare -- which did not provide higher earners with any subsidies -- but still a significant portion of their income, he said.

Consumers would pay greater out-of-pocket costs because the proposed bill eliminates cost-sharing subsidies -- government reimbursements for health care deductibles.

Because the AHCA also repeals the individual mandate -- a requirement that people who can afford it have health insurance, or pay a monthly tax as penalty -- many people likely will choose not to pay for coverage.

"You're not going to buy insurance until there's something imminent, and even then, you might not be able to afford it," Guss said. "It's a no-win situation for these older folks. And these are the people who are going to go and get emergency care, and then insurance companies will just have to swallow the costs."

Changes in Medicaid

A bigger concern to many advocates is the bill's suggested changes to Medicaid funding, especially given the growing number of seniors within Frederick County.

Under the AHCA, federal Medicaid funding -- starting in 2020 -- would be capped based on how much each state spent per enrollee in 2016. According to the CBO report, funding would be reduced by $880 billion from 2017 to 2026.

To Cindy Powell, a board member for Advocates of the Aging of Frederick County, the proposed cuts directly affect vulnerable residents -- senior citizens who depend on Medicaid for long-term care.

What many don't understand, Powell said, is that many seniors depend on both Medicare and Medicaid to survive. While Medicare does not pay for long-term stays in nursing home facilities, Medicaid does.

It also helps pay for PACE -- the Program of All-Inclusive Care for the Elderly -- which provides preventive and primary care for people 55 and older, to keep them out of long-term care and in the community.

"People see the word 'Medicaid' and they think 'poor people,'" Powell said. "They don't understand that Medicaid is the payer for a majority of long-term care for everybody. For working, middle-class Americans, Medicaid is what keeps folks like them afloat."

In 2016, 2,110 residents in Western Maryland depended on Medicaid for nursing home stays, according to the Maryland Department of Health and Mental Hygiene.

By 2030, an estimated 6,248 Frederick County residents will be living in assisted living or nursing home communities, according to the county's Department of Aging.

The cuts to Medicaid would coincide with a surge in the number of seniors around the county and the country, said Anne Montgomery, the deputy director of the Center for Elder Care and Advanced Illness at the Altarum Institute, a nonprofit organization that researches health systems.

By 2030, Montgomery said, the number of people 65 and older in the U.S. will double. That includes Frederick County, where the number of adults 60 and older is growing three times as fast as the general population.

With that increase will come more seniors depending on both Medicare and Medicaid for health care coverage. Powell and Montgomery worry that cuts to Medicaid will decrease the number of services available to seniors.

"Medicaid provides services to a lot of people," Powell said. "So, if funding comes to the state in the form of a block grant, are we pitting seniors against children? At some point, something's gotta give."

Dr. Joseph Berman, a Frederick resident and former emergency medicine doctor, has witnessed the effect that uninsured patients have on local hospitals.

Before Obamacare and before Medicaid expansion, Berman said, he treated many older residents who relied on the emergency room for primary care because they couldn't afford health insurance. But providing treatment to non-paying patients presented a problem for hospitals.

"We're going to see patients who can currently go to the doctor or hospital, but will start to come to the ER as charity patients," Berman said. "And those are costs that the hospital will not be able to recoup."

Relying on hospitals for primary care isn't the best approach for patients.

"As a former ER doctor, I can tell you that's a terrible way to get care," Berman said. "It's not focused on healing. You're coming in only when the worst happens, and you're never seeing the same doctors."

"Cutting costs by cutting service to the poor and elderly is tragic," he added. "I guess some politicians will say that if those people didn't save money, it's their fault. Well, I find that absolutely reprehensible."

Follow Kate Masters on Twitter: @kamamasters.

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