Lower-income residents have most to lose with GOP health plan

March 15, 2017

“The Maine Center for Economic Policy said older and lower-income Mainers would be particularly hard hit by the current repeal plan.

“James Myall, health analyst for the center, said residents in Hancock, Washington and Aroostook counties have the highest health insurance premiums.

“’The replacement proposal flat tax credit is worth much less than the current plan,’ he said.

“Myall said currently the true health insurance premium cost for a couple 60 years old and living in Hancock County on income reaching 150 to 160 percent of the federal poverty level is $24,000.

“’Right now their premium is capped at 3 percent of their monthly income,’ he said. Under the Republican plan they would receive a tax credit of $8,000 toward the $24,000 cost.

“’Because health insurance is so much more expensive, those tax credits just won’t go anywhere near that far,’ Myall said.”

By Jacqueline Weaver, The Ellsworth American, March 15, 2017

Ellsworth American graphic 3-15-2017

Under Obamacare, health insurance assistance is based on income and cost of insurance. Under the proposed Republican plan, residents seeking health insurance would receive a flat tax credit which does not take into account income or the cost of premiums. A tax credit is a dollar-for-dollar reduction in one’s tax bill. This chart outlines possible scenarios for single people, families and older couples under the current and proposed health care plans. GRAPHIC BY TIM SUELLENTROP/REACH MARKETING

ELLSWORTH — Although the Republican health care plan is still in flux, experts who have analyzed the bill say Maine’s older, lower-income residents would have the most to lose.

The proposal being shepherded through Congress by Republican House Speaker Paul Ryan retains aspects of the current Affordable Care Act (Obamacare) and eliminates others.

The bottom line, according to the Congressional Budget Office (CBO), is that 14 million more people would be uninsured by 2018 compared with Obamacare. That number would increase to 24 million by 2026.

Under Obamacare, the number of uninsured dropped by half, meaning 22 million more people had health insurance who did not have it before.

“We’re going backward instead of forward,” said Art Blank, CEO of Mount Desert Island Hospital in Bar Harbor.

He said that under Obamacare, the hospital has benefited by treating patients who otherwise would not have had insurance.

“This rolls back many of those benefits,” Blank said, “although it hasn’t been as robust as we would have liked it to have been.”

“We are concerned that not as many people will be covered,” he said. “The subsidies being discussed are not as accessible and are smaller in most cases, particularly for those who are older and those of lower income.”

The Republican plan, officially known as the American Health Care Act (AHCA), like Obamacare, prohibits insurance companies from denying coverage or charging higher premium prices for pre-existing medical conditions.

The proposed plan also retains family health insurance coverage for children up to the age of 26.

Still in force would be no limits on annual and lifetime coverage.

Obamacare imposes a penalty for individuals who do not buy health insurance.

The Republican plan removes the penalty and instead imposes a one-year, 30 percent surcharge on health insurance premiums on those who let their health insurance expire.

What the Republican proposal does not do is provide insurance premium subsidies to families based on income and the cost of insurance.

By 2020 it would replace Obamacare’s current income-based premium tax credits and cost-sharing reduction payments with fixed-dollar, age-adjusted tax credits.

A tax credit is a dollar-for-dollar reduction in one’s taxes — or exactly that much more money in a taxpayer’s pocket.

The Kaiser Family Foundation said in its analysis that the tax credits would provide more generous assistance to younger, higher-income individuals than Obamacare did, but much less assistance to older, lower-income people.

The Republican plan would allow insurers to charge older individuals five times what they charge younger individuals, but older people get tax credits only twice as large as younger people do.

The Republican plan also would repeal by 2018 virtually all of the taxes created by Congress in 2010 to finance Obamacare.

These include taxes on insurers, pharmaceutical manufacturers and medical device manufacturers, as well as Medicare tax surcharges on Americans earning a quarter of a million dollars a year and more.

The Joint Committee on Taxation estimates that the bill would cut taxes by almost $600 billion over 10 years.

Blank, the CEO, at MDI Hospital, said the cuts to hospitals, however, remain.

He said MDI Hospital annually provides $4.9 million in uncompensated care, which includes patients with no health insurance and others who have insurance but cannot afford the deductible.

“That will just get worse now,” Blank said.

U.S. Sen. Angus King (I-Maine) said “this bill is a disaster for seniors, who I define in this case as anyone over 50.”

Currently senior citizens are required to pay no more than three times what a younger person pays for premiums.

Under the proposed legislation, senior citizens will be required to pay up to five times what younger persons are paying for insurance.

“If you’re a 60-year-old in Aroostook County with an income of $30,000 the support for your insurance policy would fall by 70 percent,” King said.

“It’s a tax cut and shifting the cost to our citizens,” he said. “The pattern is shift and shaft.”

The Center on Budget and Policy Priorities, which advocates for low and moderate income residents, estimates repeal of Medicare taxes would give the 400 highest earning American taxpayers a $7-million tax credit.

U.S. Rep. Chellie Pingree (D-Maine) called the Republican health plan “Robin Hood in reverse.”

“It’s a huge tax cut for the wealthy at the expense of older and lower-income Americans, who will face increased costs and other barriers to care,” she said.

The Republican health plan also makes substantial changes in Medicaid.

Instead of federal reimbursements tied to state expenditures for Medicaid, the plan provides two options—a lump sum block grant to states or per capita funding with caps.

State Rep. Richard Malaby (R-Hancock) said the per-capita limits on federal reimbursements for Medicaid would “really hurt elderly people and people who are disabled.”

He said the bill also does not address “private drop,” whereby a resident might drop private insurance to enroll in Medicaid because the benefits are better and there are no deductibles.

“Before you were paying some money for health insurance and now the state pays everything,” Malaby said.

He said he hoped there would be bipartisan discussion and negotiations.

“I just hope the Republicans don’t do what the Democrats did [with Obamacare],” Malaby said. “The Democrats wouldn’t let Republicans participate and amend it and then shoved it through.”

Governor Paul LePage traveled to Washington, D.C., last week — where he tried but failed to meet with Speaker Paul Ryan — to protest the changes.

LePage, who refused to expand Medicaid in Maine, along with 18 other governors, wants a freeze on Medicaid expansion and a federal work requirement for any non-disabled adult in the Medicaid program.

U.S. Sen. Susan Collins (R-Maine) said the Congressional Budget Office estimates on potentially uninsured Americans are “cause for alarm” and should prompt the House to slow down and reconsider provisions of the bill.

“This is an extremely important debate with significant implications for millions of Americans,” she said. “We need to spend the time necessary to get this right.”

Collins said she has introduced legislation with U.S. Sen. Bill Cassidy (R-Louisiana) to expand access to health care coverage, rather than contract it.

Moira O’Neill of Surry, who unsuccessfully challenged State Sen. Brian Langley (R-Hancock County) for his seat in the last election, said the bill would make health insurance more expensive and less accessible.

O’Neill, who has a Ph.D. in nursing with a focus on policy, said the tax credit to help citizens pay for insurance would benefit only the very wealthy.

“The average income in Maine is below $40,000 a year,” she said. “And you have all those seniors living off Social Security.”

Commenting on another issue, O’Neill said many people with health insurance have very high deductibles and don’t always pay the deductible to hospitals.

“I worry about the fiscal health of the three hospitals in our county,” she said of Maine Coast Memorial Hospital, Mount Desert Island Hospital and Blue Hill Memorial Hospital.

“My guess is we are going to see people buying catastrophic coverage,” she said. “We now live in a country where there are people in power who think no one deserves to have the right to health insurance.”

She also objected to the defunding of Planned Parenthood under the Republican plan.

Planned Parenthood, O’Neill said, largely provides medical care for persons who cannot otherwise afford it.

The Maine Center for Economic Policy said older and lower-income Mainers would be particularly hard hit by the current repeal plan.

James Myall, health analyst for the center, said residents in Hancock, Washington and Aroostook counties have the highest health insurance premiums.

“The replacement proposal flat tax credit is worth much less than the current plan,” he said.

Myall said currently the true health insurance premium cost for a couple 60 years old and living in Hancock County on income reaching 150 to 160 percent of the federal poverty level is $24,000.

“Right now their premium is capped at 3 percent of their monthly income,” he said. Under the Republican plan they would receive a tax credit of $8,000 toward the $24,000 cost.

“Because health insurance is so much more expensive, those tax credits just won’t go anywhere near that far,” Myall said.

Jeffrey Austin, lobbyist for the Maine Hospital Association, said the replacement plan is “clearly less beneficial” for hospitals, whose cuts remain while taxes on others, such as pharmaceutical companies and medical device manufacturers, would be removed.

“We are very upset that the hospital cuts will remain almost entirely intact and the other three sources are eliminated,” Austin said. “This lopsided approach that leaves the hospital cuts in place is very unfair.”

Austin said the association also is unhappy that the Republican plan would phase out Medicaid expansion and change federal reimbursements to a per capita or block grant system.

He said reducing federal support for Medicaid will eventually lead to rate cuts to providers such as hospitals as well as reductions in eligibility.

“This is a big deal in Maine, where 250,000 people are on Medicaid and the total spending is around $2.6 billion,” Austin said.

“The small bit of good news is that more people are eligible for the new credits compared to the ACA system,” he said.

Jacqueline WeaverJacqueline Weaver, reporter at The Ellsworth American
Jacqueline’s beat covers the eastern Hancock County towns of Lamoine through Gouldsboro as well as Steuben in Washington County. She was a reporter for the New York Times, United Press International and Reuters before moving to Maine. She also publicized medical research at Yale School of Medicine and scientific findings at Yale University for nine years.jweaver@ellsworthamerican.com