Overcharging Seniors Will Not Fix Health Care

If you were to ask a typical Colorado resident how to fix health care in America, you can be sure he or she would not suggest that Washington allow insurance companies to price people out of affordable coverage.

Yet, Congress is now considering the American Health Care Act – a bill that would do just that. The bill would impose an “age tax” on older Americans. That means people in their 50s and 60s who are buying health insurance on their own might have to pay up to $8,400 per year more than they do now.

Right now, insurance companies are allowed to charge older people three times what other people have to pay. If this legislation passes, insurance companies could charge older Americans five times what other people have to pay, or higher.

Such a policy change fails to take into consideration that a typical older American seeking private health insurance has a median annual income of under $25,000. If the Affordable Care Act were still in place in its current form a decade from now, a 64-year-old person earning $26,500 would pay $1,700 for premiums in a year after accounting for federal assistance. Under the proposed new ACHA plan, that same person would pay $14,600 in premiums, an 858 percent increase for coverage that would also have higher out-of-pocket costs.

Having to pay thousands more for health insurance could force many to make hard choices between food, medicine, housing and other basic necessities.

In addition to increasing what insurance companies can charge, the legislation also reduces tax credits that help older Americans with low and moderate incomes pay for their health care premiums. The legislation could price more than 3 million older Americans age 50-64 out of health insurance. It could erode gains made under the current health care law, which cut in half the number of older Americans without insurance.

Shamefully, the legislation would allow insurance companies to overcharge older Americans while giving nearly $200 billion in tax breaks to big drug and insurance companies. That’s the wrong way to fix our healthcare system.

The legislation also includes other provisions that would harm older Americans. The bill would:

• Weaken Medicare by causing Medicare’s trust fund to dry up four years earlier than forecast, leaving the door open for a voucher system to replace its guaranteed protections. A voucher system would dramatically increase health care costs and risks for current and future retirees. It could cost seniors thousands of dollars out of their pockets at a time in their lives when they can least afford it.
• End the guarantee of coverage for people who receive care in nursing homes and those whose families depend on Medicaid to help seniors and people with disabilities live independently in their homes.
• Do nothing to lower drug costs. According to Kantar Media, the drug industry spent $5.4 billion in advertising in 2015, while year after year drug costs far outpace inflation. It's time to let Medicare negotiate lower drug prices and reduce barriers to global price competition by allowing for the safe importation of lower-priced drugs. There is no reason for Americans to continue paying the highest prescription drug prices in the world.

Health care costs are out of control. But this bill would mean higher prices, less coverage, and billions in tax breaks for big drug and insurance companies.

Coloradans need a health care system that lowers costs, protects consumers, and offers everyone access to quality care.

AARP is ready to work with members of both parties on responsible ways to move forward.

If you agree, please tell your elected representatives to vote a resounding “No” on the American Health Care Act.