Thought the debate over the health law was over? Not quite. Yes, Congress has shifted its focus from health care to tax reform over the past couple months. But health care faces new threats under the latest proposed tax legislation.
The Tax Cuts and Jobs Act as reported by the Senate Finance Committee on Nov. 16, 2017 includes a new provision that would both reduce health care coverage and increase costs for millions of Americans. Older adults ages 50-64 would be at particularly high risk under the proposal, facing average premium increases of up to $1,500 in 2019 as a result of the bill.
Older Adults Would Face Higher Premiums
The new provision in the Senate tax bill effectively eliminates the current health law’s requirement that most people have health insurance coverage. Lawmakers are inserting this change into the tax debate to help pay for other changes they want to make to the tax code.
Unfortunately, this change will mean higher premiums for everyone who needs to purchase coverage on the individual (non-group) health insurance market. The non-partisan Congressional Budget Office (CBO) estimates that premiums will increase by an average of 10 percent, thanks to the pool of people continuing to purchase health insurance coverage being less healthy on the whole.
The impact will be especially hard on older adults, who will see the largest price increases even though they already pay premiums up to three times higher than others. As a result of the tax bill, for federal Marketplace coverage in 2019*:
- Premiums for 50-year-olds could increase by an average $890, rising to $9,780 a year.
- Premiums for 55-year-olds could increase by an average $1,110, rising to $12,200 a year.
- Premiums for 60-year-olds could increase by an average $1,350, rising to $14,860 a year.
- Premiums for 64-year-olds could increase by an average $1,490, rising to $16,420 a year.
Actual premium increases will vary by state, with some states seeing much higher increases for older adults. In Maine, a typical 64-year-old could see her premiums increase an average $1,750 a year (to $19,230), while in Alaska, she could see her premiums increase an average $2,150 a year (to $23,650) .
13 Million Fewer Americans Would Have Health Insurance Coverage
Eliminating the health care coverage requirement would also mean that millions more Americans will become uninsured. CBO has estimated that 4 million people under age 65 would no longer have health insurance coverage as early as 2019 if this provision is enacted. By 2027, that number would rise to 13 million people left without coverage.
Since enactment of the ACA, the uninsured rate for 50- to- 64-year-olds has fallen significantly, from 15% in 2013 to 9% in 2016**. The Senate tax bill provision threatens to reverse these critical coverage gains, meaning a harmful step backward for older adults.
The bottom line – the new health care provision in the Senate tax bill will increase premiums for older adults and lead to millions more uninsured.
PDF of state-level increases here: Premium Increases under Tax Bill
* Calculations by AARP Public Policy Institute
** AARP Public Policy Institute calculations from American Community Survey (ACS) 2013-2016
Jane Sung is a senior strategic policy adviser with AARP’s Public Policy Institute, where she focuses on health insurance coverage among adults age 50 and older, private health insurance market reforms, Medicare Advantage, Medigap, and employer and retiree health coverage.
Olivia Dean is a policy analyst with the AARP Public Policy Institute. Her work focuses on a wide variety of health-related issues, with an emphasis on public health, health disparities, and private coverage.