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CBO Analysis of Graham-Cassidy: Bad news for Older Americans

Insurance premiums and out-of-pocket costs would soar and Medicaid funding would be slashed

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The bill backed by Republican Sens. Lindsey Graham (S.C.) and Bill Cassidy (La.) would pass much of the authority over health care to the states.
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A last-ditch effort by Republicans to repeal the Affordable Care Act (ACA) would make health coverage unaffordable for millions of Americans and put Medicaid back on the chopping block.

The Graham-Cassidy measure, authored by Republican Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, would gut the consumer protections of the ACA and give states free reign over how to reshape health care coverage for millions and millions of Americans.

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The legislation would impose an “age tax” on older Americans by eliminating two sources of financial assistance that help make health coverage affordable and accessible.

First, Graham-Cassidy would take away the premium tax credits that help seniors pay for health coverage. About 6 million 50- to 64-year-olds buy their health coverage in the individual market, and about half of those individuals receive tax credits to help pay their premiums, according to an analysis by the AARP Public Policy Institute.

Second, the measure would eliminate vital cost-sharing payments that help low-income Americans — especially those over 50 — afford deductibles and copayments for medical services. About 58 percent of adults enrolled in ACA marketplace plans get cost-sharing assistance, and 35 percent of those individuals are between 50 and 64 years old.

Graham-Cassidy would also allow states to get federal waivers for insurers to charge older Americans more so as to lower the cost for younger policyholders. The ACA limits the expense for older policyholders at three times the amount younger ones pay. 

According to the AARP analysis, for a 60-year-old earning $25,000 a year, premiums and out-of-pocket costs could increase by as much as $16,174 a year. If that 60-year-old lives in a state that allows insurers to charge older individuals dramatically higher premiums, he or she would face an additional $4,124 increase in premiums.

For example, in Maine, under the ACA, a 60-year-old earning $25,000 a year would pay an average of $1,608 a year in health insurance premiums in 2020. Under Graham-Cassidy, that same 60-year-old could see that premium increase by as much as $10,404. A 60-year-old in Alaska could see his or her premium increase by $26,986 in 2020.

“The Graham-Cassidy bill is a last-ditch effort to ram a bad bill, developed behind closed doors, through Congress,” said David Certner, AARP legislative policy director for government affairs. “Like earlier bills, it would increase health care costs by including an age tax, reducing coverage and undermining protections for people living with conditions like cancer or diabetes.”

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The bill also would fundamentally change the Medicaid program, which has been a safety net for millions of poor Americans and people with disabilities. Currently, 17.4 million older Americans and people with disabilities rely on Medicaid.

Over 20 years, Graham-Cassidy would slash Medicaid funding by $1.2 trillion to $3.2 trillion, turning control of the program to the states and shifting costs over time to states and Medicaid enrollees.

The bill also would end the ACA’s Medicaid expansion and instead send lump sum payments to the states from 2020 to 2026. But these payments wouldn’t make up for the elimination of tax credits, cost-sharing payments and money the states got to expand Medicaid. And, in 2027, federal Medicaid funds would be eliminated, leaving states on their own.

That would mean states would have to decide how to make up for that financial shortfall, probably by eliminating services, reducing eligibility for benefits or cutting payments to doctors and hospitals — something that would likely result in fewer providers being willing to see Medicaid patients. It also means that states would likely be forced to cut services that many older Americans rely on for long-term care, including home- and community-based services and nursing home care.

Majority Leader Mitch McConnell (R-Ky.) has said he will bring the Graham-Cassidy bill to the floor for a vote only if he knows he has 50 votes. If Republicans get 50 votes, then Vice President Mike Pence would cast the tie-breaking yes vote. As of Wednesday, the bill sponsors said they were close to reaching that threshold, and the majority leader announced he intends to bring the legislation to the Senate floor next week. 

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