Graham – Cassidy Health Reform Bill Update.

21 Sep , 2017,
jtdickerson
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Currently, the United States Senate is considering a Health Care Reform Bill devised by South Carolina Senator Lindsay Graham (R-SC), Bill Cassidy (R-LA), Dean Heller (R-NV), Ron Johnson (R-WI) and former U.S. Senator Rick Santorum (R-PA).

Kaiser Family Foundation has a very good summary of the bill available by CLICKING HERE or at the link below:

http://files.kff.org/attachment/Summary-of-Graham-Cassidy-Heller-Johnson-Amendment

 

There are a number of measures for market stabilization for 2018 – 2020, that could be very helpful. However, we have reviewed other elements of the bill that could have severe negative consequences for South Carolina residents, which we will outline below. It is important to keep in mind that the U.S. Senate is attempting to pass this bill via simple majority, which is only possible until September 30, 2017.

Positive parts of the bill include premium ratio flexibility and near term market stabilization funds.

HOWEVER, we have noticed a few “lesser talked about” points that could have SEVERE consequences for South Carolina residents:

 

Something to point out that will likely hurt many older and lower income SC residents:

Text of the bill:

For 2018-2019, ACA premium tax credit formula and eligibility standards are unchanged, except:

– For end of year reconciliation of advance credits, the cap on repayment of excess advance payments does not apply.

Let’s look at someone age 63, who worked hard their entire life, saved for retirement, and retired at age 63, but still works part time to help pay the bills and get out of the house. I see these folks every day at the grocery store, etc.

Someone age 63 working as a part time cashier making $15k/year, currently gets an $817/mo. tax credit to help afford health insurance (remember, they’re working part time, so employer doesn’t offer a group plan to them). Lets say that person gets laid off of the job in September and cannot find new employment. NOW, due to circumstances beyond that persons control, they fall below the tax credit eligibility threshold for the year (currently ~$11,880) so must pay the full premium for the remaining months ($785/mo for the cheapest bronze plan – $841/mo for cheapest Silver plan in Charleston County SC) AND repay the tax credit they were previously receiving – an extra $7,353 owed immediately to the IRS when they file taxes the following year, due to NO fault of their own.

Currently, the ACA provides clawback protections that limit the repayment amount to something reasonable in these situations.

Some may say “but health insurance was cheaper be fore ACA/Obamacare”, keep in mind, prior to the ACA we had 5:1 age banding – most people age 60 – 65 were paying ~$1200/month for a policy IF they could purchase one at all due to pre-existing condition limitations. And if they had a Pre-Existing condition, the South Carolina High Risk pool is EVEN MORE EXPENSIVE – to the tune of $1900 – $2400/month at age 60-65. Don’t believe me? You can view South Carolina High Risk pool rates by CLICKING HERE.

The ACA/Obamacare certainly isn’t perfect, but we would be better off FIXING ACA issues rather than passing bad legislation like this……