Under the current U.S. House plan to replace the Affordable Care Act (ACA), about 454,000 Floridians age 50-64 enrolled and receiving tax credits in the ACA Marketplace would see higher health-coverage premiums than they pay under current law, more than in any other state, an AARP analysis shows.
If implemented today, for older Americans 50-64, the reduction in tax credits would range from about $830 a year to about $5,850 a year for the ACA Marketplace “Silver plan” health coverage, the AARP analysis shows
Hardest hit would be those older and with the lowest incomes. For example, a person age 64 with an income of $15,000 a year would see tax credit reductions of $5,850 per year. A person age 50 with income of $25,000 a year would see tax credit reductions of $848 per year. Medicare eligibility begins at age 65.
Only one segment of Marketplace enrollees age 50-64 – those age 50 and 55 with incomes of $45,000 – would see higher tax credits under the House plan, according to the AARP analysis.
These losses are averages for the nation. Florida is a high cost state and Floridians would see even larger reductions in premiums. According to the Kaiser Family Foundation Premium Calculator, the reduction in tax credits for Floridians at 60 earning $20,000 could be as high as $13,000 (in Monroe County).
With about 20 million residents, Florida would have more Marketplace enrollees age 50-64 affected than California, with a total population of about 37 million. California would see about 399,000 people age 50-64 who are enrolled in health coverage and receiving tax credits through an ACA Marketplace, AARP’s analysis shows.
The additional costs cited above reflect the difference between current law and the flat tax credits, adjusted by age, that are proposed in the House plan. Those flat tax credits start at $2,000 per year for the younger participants and rise to $4,000 per year for people age 60+. Under the ACA, Marketplace enrollees receive a refundable tax credit based on their income and the cost of the second-lowest-cost Silver Plan offered in the Marketplace. Average tax credits under current law for the illustrative ages and income vary from $1,688 a year for a 50-year-old with an income of $45,000 to $9,854 a year for a 64-year-old with an income of $15,000.
AARP analysts noted that the impacts described above actually understate the real financial impact of the House plan on Floridians 50-64, because of another provision now under consideration by Congress.
That provision, which AARP calls the “Age Tax,” allows insurers to charge older people up to five times as much for health coverage than their youngest customers. Current law allows insurers to charge older customers no more than three times as much as their youngest customers.
Nationally, combining the “Age Tax” with the reduced flat tax credits could leave health-insurance customers age 50-64 facing up to $8,400 per year in higher costs for coverage similar to their coverage today.
The bill includes other changes that would increase costs for people buying insurance in the Marketplace. It would eliminate financial help for cost-sharing for lower income Americans, such as help with deductibles and copays. The Congressional Budget Office, the congressional agency that analyzed and “scored” the bill, estimates that in 2026, with all these changes, premiums for a 64 year old, earning $26,500 will increase by $12,900.
AARP Florida State Director Jeff Johnson noted that AARP’s concerns with the House health-coverage plan don’t end with its negative impact on older consumers in the individual or small group markets.
Far-reaching changes proposed to Medicaid also are a concern for older Floridians, since the cuts to Medicaid proposed by the House plan would reduce Medicaid spending by $880 billion over 10 years nationwide. With care for about two-thirds of Florida’s roughly 70,000 nursing-home residents currently being paid for through Medicaid, Johnson noted that deep cuts to Medicaid might have devastating impacts on Florida’s 2.67 million family caregivers and their loved ones.
Also, the House plan would also affect Medicare’s solvency. When the ACA was adopted in 2010, the Medicare Part A trust fund was forecast to be unable to meet anticipated costs by 2017. As a result of the ACA, Medicare is expected to cover its Part A costs until 2028. Because the House plan proposes eliminating the Medicare payroll tax for high earners, the Part A trust fund will be insolvent 4 years earlier, by 2024, according to some estimates.
For more information, go to www.aarp.org/NoAgeTax.
For a county-by-county breakdown of impacts in FL counties, go to: http://kff.org/interactive/tax-credits-under-the-affordable-care-act-vs-replacement-proposal-interactive-map/