Older Americans may have to postpone retirement under New health bill

[scrabbler1]

The American Academy of Actuaries put out a good piece about key parts of HI reform, from the mandate to age ratios to risk pool balance.


http://actuary.org/files/publication...ate_020617.pdf


Here is their conclusion:

"As one of the conditions needed for the individual market to be sustainable, enrollment numbers must be sufficient and the risk profile must be balanced. Although the ACA has dramatically reduced uninsured rates, enrollment in the individual market has generally been lower than expected and enrollees have been sicker than expected. Both of these factors have contributed to substantial premium increases in many, but not all, states.

Many options have been put forward to improve the short- and long-term sustainability of the individual market, either through changes to the ACA or by replacing the ACA with a different approach. If as part of this a goal is to provide coverage to people with pre-existing conditions at standard premiums, it is vital to enroll enough healthy people to spread the costs of those who are sick. Currently, the ACA’s individual mandate, annual open enrollment period, and premium subsidies aim to achieve a balanced risk profile. Increased penalties for non-enrollment could help improve the risk profile, as could improving premium affordability, for instance through increased premium subsidies or additional funding for high-risk enrollees. Weakening the incentives for participation, however, could further exacerbate adverse selection issues and lead to higher premiums and more uninsured."

[explanade]

How the AHCA achieves lower average premiums in 2026.

Drive out older people:

Quote:

But the way the bill achieves those lower average premiums has little to do with increased choice and competition. It depends, rather, on penalizing older patients and rewarding younger ones. According to the C.B.O. report, the bill would make health insurance so unaffordable for many older Americans that they would simply leave the market and join the ranks of the uninsured. The remaining pool of people would be comparatively younger and healthier and, thus, less expensive to cover. Other changes would help make health insurance skimpier — cheaper, but with deductibles that are higher than those criticized by Republicans under Obamacare. Under the G.O.P. bill, the C.B.O. finds that insurance premiums would first spike, by 15 percent to 20 percent more than under Obamacare over the next two years. But by the end of a decade, the average plan would cost 10 percent less than it would under the Affordable Care Act. (Over all, though, 24 million fewer people would have insurance, it found.) Insurers price their products by spreading out the cost of care for their customers. In general, older customers cost substantially more to cover than younger ones because they have more health needs and use their insurance more. By discouraging older people from buying insurance, the plan will lower the average sticker price of care. But that doesn’t mean prices will get lower for everyone. Currently, the subsidies under Obamacare are devised to help limit how much low- and middle-income Americans can be asked to pay for health insurance. The Republican plan works differently. It increases the amount that insurers can charge older customers, and it awards flat subsidies by age, up to an income of $75,000. On premiums alone, prices would rise by more than 20 percent for the oldest group of customers. By 2026, the budget office projected, “premiums in the nongroup market would be 20 percent to 25 percent lower for a 21-year-old and 8 percent to 10 percent lower for a 40-year-old — but 20 percent to 25 percent higher for a 64-year-old.” But the change in tax credits matters more. The combined difference in how much extra the older customer would have to pay for health insurance is enormous. The C.B.O. estimates that the price an average 64-year-old earning $26,500 would need to pay after using a subsidy would increase from $1,700 under Obamacare to $14,600 under the Republican plan. Perhaps unsurprisingly, the C.B.O. concludes that many, many fewer 64-year-olds will continue buying insurance in this market. By 2026, the uninsured rate for those 50 to 64 earning less than about $30,000 would more than double, from around 12 percent to around 30 percent. Those older customers who would lose out on insurance coverage are more likely than the young customers who would buy it to need help paying big medical bills.

https://www.nytimes.com/2017/03/14/u...er-people.html

[samclem]

There's not much in this present, Phase-1-of-3, proposal that does or can address the underlying problem, which is the cost of medical care (not the cost of insurance--which largely is a result of the cost of the care). That's just the way it is.

"What are you doing?"
"Jacking up my car to change the flat tire."
"The tire still looks flat. I don't think you are making things better. This isn't working."

[youbet]

Quote:

Originally Posted by gerntz - - No reason for young-uns to subsidize olders. Olders are the ones with $$$ by & large.

+1

Agree very much. It's really time for FIRE'd folks and FIRE'd folk wannabees to think in terms of hitching up their pants and paying their own way.

[explanade]

There were claims that the ACA was indirectly reducing the growth rate of the costs.

The other way is that the provider networks are limited so the insurers are excluding those providers who hold out for higher reimbursements. Of course that's not necessarily positive for patients.

It would take a major restructuring of the way health care is organized and people's mindset to actually reduce costs.

Something like limiting doctors' compensation, regulating prices to some extent.

Don't know any other way to change what is essentially a free-for-all for providers and hospitals to maximize profits. Generally Americans support companies rights' to pursue maximizing of profits. Some may say health care can't be treated like any other business but currently there isn't the political support to take drastic measures like say tax health care benefits from employers or regulate prices or limit doctor compensation.

[tulak]

Quote:

Originally Posted by samclem There's not much in this present, Phase-1-of-3, proposal that does or can address the underlying problem, which is the cost of medical care (not the cost of insurance--which largely is a result of the cost of the care). That's just the way it is. "What are you doing?" "Jacking up my car to change the flat tire." "The tire still looks flat. I don't think you are making things better. This isn't working."

+1.

I really don't care what bill passes, etc, but I believe that everyone should be able to have affordable health coverage.

ACA was doomed to be unaffordable, because they didn't deal with controlling costs. But I always figured that first you have to get everybody health coverage and then figure out how to make it sustainable. Otherwise there's no vested interest in trying to make it work.

It doesn't look like that's the direction we're going, but hopefully I'm wrong.

[Pilot2013]

Quote:

Originally Posted by youbet +1 Agree very much. It's really time for FIRE'd folks and FIRE'd folk wannabees to think in terms of hitching up their pants and paying their own way.

Be careful....

[Fedup]

Quote:

Originally Posted by TreeHugger Saving money is easy. Just eliminate Medicaid altogether and they will save even more money. How about making healthcare more affordable for *more* people while saving money?

It allows them to move the bill forward. But I'm refraining from making any more comment on this before I go out political. So help me G.

[explanade]

Quote:

Originally Posted by youbet +1 Agree very much. It's really time for FIRE'd folks and FIRE'd folk wannabees to think in terms of hitching up their pants and paying their own way.

What about people who are fired or laid off in their late '40s or 50s, can't easily find jobs with benefits and do not have the means to RE?

[Fedup]

Quote:

Originally Posted by explanade What about people who are fired or laid off in their late '40s or 50s, can't easily find jobs with benefits and do not have the means to RE?

Everybody in my family has to work until 65 for healthcare. One brother will have to work until 70 because his wife is 4-5 years younger. If he gets Medicare and she doesn't have insurance, its will be worse off for them. Some got laid off along the way, not just one time but multiple times.

[Pilot2013]

Quote:

Originally Posted by explanade What about people who are fired or laid off in their late '40s or 50s, can't easily find jobs with benefits and do not have the means to RE?

I think that's where the FIRE'd part comes in? Financially Independent, Retired Early?

[daylatedollarshort]

Quote:

Originally Posted by youbet +1 Agree very much. It's really time for FIRE'd folks and FIRE'd folk wannabees to think in terms of hitching up their pants and paying their own way.

By paying $14,600 for health insurance premiums on a $25K income, per the NY Times article except above? Aren't most early retirees actually retiring because of job loss and disability and not because they are financially independent? After out of pocket medical costs, what would be left over for all other expenses like food, rent and transportation?

[youbet]

Quote:

Originally Posted by TreeHugger How about making healthcare more affordable for *more* people while saving money?

There is a difference between healthcare being "affordable" for an individual and the individual being willing to make the financial sacrifice and buy health insurance.

Sadly, we have citizens, frequently young and healthy, who say no to paying a few hundred bux per month for health insurance and instead spend a few hundred bux per month for payments on their new Miata (when driving a beater would get them to work OK). Their spending priorities put HI into the discretionary spending category and anything "fun" ranks higher.

Until we have either (1) effective mandates that everyone either buys insurance or qualifies for welfare or (2) we have some sort of single payer system (Medicare for everyone), nothing is going to work. Or at least it won't work well.

[Fedup]

Quote:

Originally Posted by tinlizzy My 25yo's catastrophic medical plan thru his employer was $1.49/month. I don't remember the specifics. If 20-29 year olds can buy that on the open market then the refundable tax credit will benefit them greatly.

My kid paid $253. I'm hoping with the new health plan she can go down to $150.

[TreeHugger]

Quote:

Originally Posted by youbet +1 Agree very much. It's really time for FIRE'd folks and FIRE'd folk wannabees to think in terms of hitching up their pants and paying their own way.

How about coal miner in his 50s with black lungs? He will have now "access" to purchase insurance just like he has an access to go on luxury Caribbean cruise.

You are right people like me with 8k /month dividend income from equity index funds will do just fine either way.

[youbet]

Quote:

Originally Posted by Pilot2013 Be careful....

Please expand.

[explanade]

Quote:

Originally Posted by Pilot2013 I think that's where the FIRE'd part comes in? Financially Independent, Retired Early?

Most of us here are very fortunate, having been able to amass millions well before retirement age.

But I believe most people don't even have $50k in savings by the time they reach 65.

[youbet]

Quote:

Originally Posted by TreeHugger How about coal miner in his 50s with black lungs? He will have now "access" to purchase insurance just like he has an access to go on luxury Caribbean cruise. You are right people like me with 8k dividend income from equity index funds will do just fine either way.

I'm a bit confused as to why you're including a "coal miner in his 50's with black lungs" in the FIRE'd or planning to soon be FIRE'd group I referred to. Could you explain?

Do you really think that a Financially Independent, Retired Early (FIRE'd) person needs to have middle class working families paying taxes to provide them with HI subsidies? I don't. I'm comfortably FIRE'd (along with many who participate on this board) and am willing to pay my own way without those still working subsidizing me. I know, I know, it's cool to "milk the system" and all that. But it's just not my thing.

[Pilot2013]

Quote:

Originally Posted by youbet Please expand.

We have already, in just a few posts since your re: comment, seen the emotional responses. I THINK I understood your post to be about those Financially Independent persons hitching up their pants. But I had a feeling it would be applied to all sorts of situations (Black Lung, etc) that obviously should fall into a different category.

That's what I meant.

[explanade]

I thought this thread was about older Americans.

Not just people who achieve FI in their 40s and 50s.