How the BCRA Could Affect Iowans

The BCRA cuts nearly $59 billion over 10 years from the Hospital Insurance trust fund by repealing a 0.9 percent payroll tax on higher-income workers. This would hasten Medicare’s insolvency and diminish the program’s ability to pay for services in the future. The bill would also increase Medicare premiums by removing nearly $26 billion in required payments from pharmaceutical companies over 10 years from the Part B trust fund.

• In 2016, Medicare covered 555,753 Iowans, or 18 percent of the state’s population.
• 87 percent of Iowans with Medicare are over age 65, and 13 percent are people with disabilities under the age of 65.
• 625,579 (or 20 percent of) Iowans are between the ages of 50 and 64 and will transition into Medicare over the next 15 years.

The bill discriminates against the 6.1 million Americans ages 50-64 who purchase coverage in the individual (non-group) health insurance market by allowing insurance companies to charge older people up to five times more than others pay for the same coverage (referred to as 5:1 age rating). The bill also cuts tax credit assistance for 3 million lower- and moderate-income 50- to 64-year-olds based on their age.

• 89,056 (or 14 percent of) of Iowans between the ages of 50 and 64 are enrolled in the individual market and would be impacted by age rating under the BCRA.
• In 2015, half of all Iowans ages 50-64 buying insurance in the individual market had incomes of $28,800 or less a year.

The bill increases premiums for lower- and middle income older adults by eliminating or reducing tax credits and allowing insurers to charge older adults more (5:1 age rating). And while all older adults will pay more, those with incomes between 350 to 400 percent of the federal poverty level (FPL) would be hardest hit. The BCRA also eliminates subsidies that help lower-income adults pay for deductibles and copays.

• 50- to 64-year-olds comprise 49 percent of all adults receiving premium tax credit assistance in Iowa and would face higher costs under the bill. Examples of how the BCRA would affect lower- and middle-income older adults:
  • In 2020, 60-year-olds in Iowa earning $20,000 annually could pay up to $4,640 more a year in premiums and $4,555 more a year in deductibles, coinsurance, and copayments.
  • In 2020, 60-year-olds in Iowa earning $45,000 annually could pay as much as $15,190 more a year in premiums.

The bill allows states to waive or weaken requirements for services that must be covered by health insurance (known as Essential Health Benefits) as well as current limits on consumers’ annual out-of-pocket spending. These changes could allow insurance companies to sell less comprehensive, potentially even skimpy, coverage and/or require consumers to pay higher deductibles, coinsurance and copayments. The result would be less choice, higher costs, and reduced access to needed services for people with pre-existing conditions.

• About 217,777 (or 36 percent of) 50-64 year olds in Iowa have a preexisting condition. Threatens financial protections for people with individual and employer coverage.

The BCRA allows states to weaken important consumer protections that ban insurance companies from capping how much they will cover annually, or over a person’s lifetime — leaving people vulnerable to costs that could be financially catastrophic to them. States could also weaken or waive requirements that protect consumers from very high annual out-of-pocket spending (such as deductibles and copays). These changes would affect people with employer-sponsored coverage, in addition to people in the individual market.

• 89,056 (or 14 percent of) Iowans ages 50-64 receive coverage through the individual market and could face higher costs due to these changes.
• 447,141 (or 70 percent of) Iowans ages 50-64 receive coverage through their employer, and could also see face higher costs due to these changes.
• Every year, 122,758 Iowans ages 18-64 who work for a large employer leave or lose their jobs and may have to buy coverage in the individual market.

The BCRA creates a capped financing structure in the Medicaid program and cuts $772 billion in federal Medicaid spending—more than 25 percent— over ten years. The cut would increase to about 35 percent by 2036. States will likely make further cuts to keep spending below what they would receive under the bill (their per capita cap amounts). Both per capita cap and block grant financing would likely shift significant costs to states, state taxpayers, and families. The BCRA could lead to cuts in provider payments, program eligibility, services, or all three of the above— ultimately harming some of our nation’s most vulnerable citizens.

• One out of every 7 Medicaid beneficiaries in Iowa (85,000 people in FY 2026) would have to lose coverage in order for those remaining to maintain their current level of service.
• Iowa would lose $4.9 billion in total federal and state Medicaid funding from FY 2020- FY 2026—a 10.6 percent cut. Millions of Medicare beneficiaries rely on Medicaid for services that Medicare does not provide—including long-term services and supports (LTSS).
• In FY 2013, about 93,000 low-income Medicare beneficiaries in Iowa were also covered by Medicaid.

Capping Medicaid impacts these dually enrolled individuals. It could also result in the loss of critical services and have the hidden impact of increased hospital admissions and use of other expensive services that will ultimately cost more to the federal government. Most people prefer to receive long-term services and supports in their homes and communities. Nursing home care is generally more costly than serving people in the community, but home and community-based services (HCBS) is an optional service in Medicaid. Cutting federal Medicaid spending jeopardizes access to HCBS, forcing people to rely on more expensive nursing home care.

• In FY 2014, nursing facilities comprised 69.8 percent of Medicaid LTSS expenditures in Iowa for older adults and people with physical disabilities.

The bill’s implications for health insurance coverage will hurt the economy. Less access to health care will mean lost productivity and less economic growth.

• By 2026, Iowa could lose more than $1.3 billion in business output due to the BCRA. Significantly increases the number of uninsured Americans. Many Americans face the possibility of losing their health care coverage.
• 232,000 Iowans will lose coverage by 2022 as a result of the bill.

Detailed source information at: http://bit.ly/2t9DISm