On the heels of a Congressional Budget Office report that showed that the coverage levels for older health care consumers and low income people would take an especially hard hit under the GOP’s health care legislation, Republican Senators said Tuesday that they were working on an amendment to the bill that would make the tax credits more generous for certain people on the non-group market.
“There are things we can do to tailor the tax credit in a way to make it more attractive to people and more helpful to people on the lower end, with a phaseout that’s a little less steeper than what the House has,” Sen. John Thune (R-SD) told reporters Tuesday.
Thune, a member of the GOP’s Senate leadership team, is working on the amendment. He said that it might be added while the bill was still in the House, or it could be considered once the legislation made it to the Senate, as other amendments have also been floated around by Republicans dissatisfied with the current House bill.
Axios obtained some of the details on the changes Thune is working on. The tax credit would be phased out by $150 for every additional $1,000 earned between 400 and 621 percent of the poverty level. Those between 250 and 400 percent of the poverty level would receive the same age-based tax credit as in the House bill. Those making less than 250 percent of the poverty level would receive a tax credit that is both income- and age-based, Axios reported.
Under the Affordable Care Act, the tax subsidies for individual insurance plans scaled according to premium averages in geographic areas and to an individual’s income, with low income people and those living in high-cost areas getting the most assistance from the federal government. The Republican-proposed tax credits scale by age, but not nearly enough to keep up with premium increases older people face, especially after another provision in the GOP bill allows insurers to charge older consumers more in comparison to younger people. (The tax credits also begin to taper off for individuals making 75,000 or more, but those on the lowest end of the income spectrum don’t get any additional help.)
The CBO report showed that eventually the GOP bill, the American Health Care Act, would slow premium growth in relation to what’s projected under the ACA. But that slow-down is driven by older people being less able to buy insurance under the new tax credit scheme, creating younger and healthier risk pools that are cheaper for insurers to cover.
The CBO found a 64-year-old would see premiums rise by 20 percent to 25 percent higher by 2026 than under the current law. It also predicted that, as the number of uninsured would rise under the GOP plan broadly, it would disproportionately rise among older people with lower income.
An AARP analysis of the bill predicted that a 64-year-old making $26,500 a year would pay $14,600 annually in premiums under the GOP tax credit scheme.
“Folks over 60 earning $20,000 a year would have a hard time affording insurance, and that’s not good,” Sen. Bill Cassidy (R-LA) said Tuesday.
Similar concerns about how the GOP plan effects older and poorer consumers are also beginning to trickle down into the House.
— Ileana Ros-Lehtinen (@RosLehtinen) March 14, 2017
— Ileana Ros-Lehtinen (@RosLehtinen) March 14, 2017
The effect of the tax credits is compounded by the massive cuts in funding being proposed for Medicaid. Older and low-income people who can’t rely on the program due to the GOP’s overhaul of it also won’t get much help from the tax credits being offered, a problem that will be especially acute in rural states that expanded Medicaid.
“Are we sufficiently helping those in the lower-income, rural, older population, which is increasingly a large part of my state? That is a big concern,” Sen. Shelley Moore Capito (R-WV), whose state expanded Medicaid, told reporters Tuesday.
Adjusting this aspect of the legislation came up in a GOP Senate lunch with Vice President Mike Pence, Health and Human Services Secretary Tom Price and the House committee chairmen shepherding the repeal bill.
“Today, they expressed sympathy with the perspective that the 60-year old making $20,000 would need to have some further consideration than currently is given,” Cassidy said after the meeting.
Ways and Means Chairman Kevin Brady (R-TX), one the House chairs at the Senate lunch, told reporters later Tuesday that “no decisions have been made” and to his knowledge the House was not considering means-testing the tax credits.
“We are listening to our members in the House and the Senate on how best to make sure that credit works at every income level and every size of family level and can allow them to buy them the health care they need at that point in their lives,” Brady said.
Of course, the prospects for the current bill passing the House at the moment are extremely fragile and any changes proposed might further complicate the whip calculus. Conservatives in the House have staged their own revolt because they claim the proposed tax credits would a new entitlement program.
“There are multiple different points that are bought up and I guess the difficulty is, keeping everybody in the basket as they attempt to address the issues that are brought up,” Sen. Bob Corker (R-TN) said after Tuesday’s lunch.