The nation’s most famous retiree organization, which represents 38 million older Americans, has fired off letters critical of two proposals that have figured prominently in GOP discussions about replacing the Affordable Care Act. One of those proposals would relax the law’s “age bands.” The other would transform Medicaid into a so-called block grant.
And it’s not just letters AARP is sending. A spokesperson for the organization confirmed that it is asking its members to call lawmakers who sit on the health subcommittee for the House Committee on Energy and Commerce, which took up these ideas in a hearing Thursday.
AARP’s objections alone aren’t enough to stop Republicans from including versions of these ideas in health care legislation, of course. But the organization represents a demographic that happens to be an essential part of the Republican voting coalition.
Taken together, the group’s warnings constitute one more reminder of the difficult policy trade-offs, and equally difficult politics, that Republicans are sure to confront as their effort to repeal “Obamacare” moves forward.
How Two GOP Health Care Ideas Could Hurt Older Americans
The creation of age bands was among the more important changes that the Affordable Care Act introduced for insurers selling directly to individuals. Previously, insurers in most states could adjust premiums based on the expected medical needs of new customers ― which meant, inevitably, charging older customers a lot more than younger ones.
The Affordable Care Act put a stop to that, by stipulating that insurers could charge their oldest customers no more than three times what they charge their youngest ones. This requirement is a big reason why many younger people pay more for insurance now than they did before the health care law came along.
Republicans love to talk about how relaxing or eliminating the age bands would mean lower premiums for younger people. And that’s true, even if the benefits for young consumers would be less dramatic than Republicans sometimes suggest.
What Republicans don’t mention is that, as a consequence, premiums for older people would go back up again. And in Wednesday’s letter, AARP warned that such a change could hurt people just as they’re getting to the age when medical problems become more common. Such a change, the group warned, “would severely limit, not expand, access to quality, affordable healthcare.”
As for Medicaid, Republicans have been talking about converting it into a block grant since long before Obamacare. The idea is to give states much more control over the program and, more importantly, to reduce the program’s funding ― perhaps by a dramatic amount. According to the Center on Budget and Policy Priorities, the most recent budget from House Speaker Paul Ryan (R-Wis.) would mean 33 percent less spending within the decade.
Republicans boast about these savings for the federal Treasury, along with the control it would give governors who bristle under Washington’s oversight. But with less money to spend, states wouldn’t be able to finance as many benefits for as many people.
They’d have to make cuts of their own ― some of which would almost surely fall on older people, particularly since the majority of spending in Medicaid goes to elderly and disabled people who use it to supplement Medicare. Among other things, Medicaid is the nation’s largest payer of nursing home care.
Predictably, AARP has noticed this too.
“Disabling conditions that affect older adults include Alzheimer’s disease, stroke, and chronic and disabling heart conditions,” the organization said in its letter. “Individuals may have low incomes, high costs, or already spent through their resources paying out-of-pocket for [long-term care], and need these critical services. For these individuals, Medicaid is a program of last resort.”
Why AARP Opposition Is A Warning Sign For Republicans
AARP has a broad policy agenda, including two other items ― protecting Medicare and Social Security from cuts ― that are generally higher institutional priorities. But changes to the health care law and Medicaid are bound to affect millions of its members negatively. AARP isn’t going to stay quiet about that. It’s safe to assume the group will also be reminding Republicans that older Americans voted for President Donald Trump and GOP candidates by large margins.
And it’s not like AARP is the only group that is going to take a very active interest in what happens to the Affordable Care Act.
Republicans talk a lot about financing their schemes with changes to the tax treatment of employer health insurance. That’s bound to raise screams from both businesses and unions (just like a similar provision of the Affordable Care Act has).
Most Republican ideas for replacing the law involve some combination of fewer people insured and weaker coverage for those who have insurance. That doesn’t sit well with hospitals, which end up taking losses when people who need care can’t pay for it.
And then there are the proposed changes to Medicaid, which would be sure to alienate not just AARP but a whole bunch of other constituencies, not least among them Republican governors who presided over expansion in their states.
Republicans can negotiate with these potential critics to win their consent, or at least mute their concerns. But trade-offs in health policy are inevitable, and every accommodation that Republicans offer to a group like AARP, employers, hospitals or GOP governors will show up as a cost for somebody else.
Meanwhile, the negotiations themselves are bound to take time and effort, and create plenty of embarrassing news stories ― again, just as they did for Democrats in 2009 and 2010, when President Barack Obama and his allies were crafting the legislation Republicans now seek to erase.
What Republicans Can Expect Politically As Repeal Goes Forward
Democrats were willing to endure that bad publicity ― and, more broadly, to stick with a politically difficult process, even as it dragged out for over a year ― because making health care available to everybody had been one of the party’s most important priorities for something like three-quarters of a century.
Recent news suggests Republicans can expect a similarly difficult experience if they proceed. Already, lawmakers are getting flooded with calls and hearing from protesters worried about losing insurance. And if the polls are correct, the public suddenly feels more favorably about the ACA than it did before ― perhaps because the prospect of losing the program is making people think about the parts they like.
At last week’s party retreat in Philadelphia, during a private meeting recorded and leaked to the press, Republican lawmakers talked openly of their inability to deliver promises of better care at lower costs. Over the weekend, Rep. Dave Brat (R-Va.) practically begged his supporters to start speaking out, because town halls have gotten so difficult.
And on Tuesday, in an interview with Vox, Rep. Phil Roe (R-Tenn.) admitted that rolling back the Medicaid expansion “is going to be a little harder than I thought” because so many people, in so many states, have come to depend on the program.
Republicans still have the votes in Congress to pass repeal legislation, and in Trump they have a president who would sign that bill into law. Having invested so much time in the cause, having made such concrete promises to their voters and the many people unhappy with how Obamacare has worked for them, GOP leaders would find it difficult to walk away.
But seeing repeal through the legislative process would require an enormous investment of political capital and time ― leaving less of each for tax reform, spending bills and other priorities. And that’s to say nothing of how people would feel about a world in which the Affordable Care Act were gone ― to be replaced, maybe, with a system in which people face even greater exposure to medical bills.
That’s a high political price to pay. Republicans will have to decide if it’s worth it.
This story has been updated with further details about AARP’s outreach efforts.
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