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Health Care Recommendations: Senate Finance

May 19, 2017

The Honorable Orrin G. Hatch
Chairman Senate Committee on Finance
United States Senate
Washington, DC  20510

Dear Chairman Hatch:

On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am writing in response to your May 12 letter requesting comments and recommendations regarding health care legislation.  Although our views differ on the Affordable Care Act, we do share your concern about the importance of providing high-quality, affordable health care for all Americans. 

We are opposed to the House-passed American Health Care Act because of its adverse impact on older Americans and the Medicare and Medicaid programs and would like to see many of its proposals dropped or greatly improved in the Senate.  In particular, we oppose:

  • Reducing the Medicare Part A Hospital Insurance trust fund’s solvency by repealing the ACA’s 0.9 percent Hospital Insurance trust fund payroll tax on wages above $200,000 per individual or $250,000 per couple.  Accelerating the exhaustion of the Part A trust fund would likely lead to cuts in Medicare, including privatizing the program, that would be detrimental to current and future beneficiaries.  

  • Driving up seniors’ out-of-pocket costs by repealing the ACA’s subsidies, based on income and the cost of health insurance, that help defray the cost of premiums.  The AHCA would provide refundable tax credits ranging from $2,000 to $4,000, based solely on age.  For many people age 60 and older, a $4,000 tax credit would fail to make comprehensive coverage affordable.

  • Allowing insurers to charge older enrollees five times more than younger ones.  The Congressional Budget Office predicts that by 2026 this provision will substantially raise premiums for older people, e.g., 20 percent to 25 percent higher for a 64-year-old.

  • Allowing insurance carriers to charge certain enrollees with pre-existing conditions thousands of dollars more than healthier individuals.  This proposal would be particularly harmful to the 40 percent of enrollees age 50 to 64 who have one or more pre-existing condition.

  • Imposing an onerous premium surcharge of 30 percent for individuals who reenter the insurance market after a lapse in coverage of over 63 days.  Although this penalty applies to all individuals, it could be particularly burdensome for older, sicker individuals who rely more heavily on health insurance than younger and healthier individuals.  Breaks in coverage are often due to honest mistakes or misinformation, but the AHCA does not include any exemptions to help in such cases.   

  • Jeopardizing long-term care and other services by restructuring Medicaid into per capita caps or block grants.  Middle class Americans often rely on Medicaid for long-term services and supports when they exhaust their savings.  Nearly two-thirds of all nursing home residents’ care is financed in part by Medicaid.  In addition, Medicaid provides home and community-based services that allow seniors to stay in their homes.
     
  • Phasing out the Medicaid expansion will take away health coverage for low-income seniors under the age of 65.

  • Making services more difficult to access by eliminating retroactive and hospital presumptive eligibility of Medicaid beneficiaries. Many people do not enroll in Medicaid, often because they aren’t aware they are eligible.  Under current rules, when they come to a hospital for care and are eligible for Medicaid, they can be enrolled temporarily.  Under current law, individuals can be retroactively enrolled for a 90-day period.  The AHCA would reduce the retroactive enrollment period to a month.  These changes will make it harder for seniors to get prompt care and for doctors and hospitals to be reimbursed. 

The National Committee urges you to support policies that will make health insurance affordable and accessible for older Americans and that will strengthen the Medicare and Medicaid programs.

Sincerely,

Max Richtman

President and CEO



   

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