American Health Care Act: What Seniors and Their Loved Ones Need to Know

The Trump Administration released a proposed plan to replace the Affordable Care Act. If passed, Trump’s American Health Care Act (AHCA) will negatively impact older Americans as outlined below. 

Premiums and Tax Credits:
AHCA provides tax credits based on age. People over age 60 will get a $4,000 tax credit. However, they will be charged more for coverage by the insurance carriers. It is estimated that people over age 60 will pay 25%- 60% more in premiums, amounting to thousands of dollars more per year for insurance coverage. 

• Insurers could charge older adults 5 times more than they charge younger adults for the same coverage. 
• Coverage cannot be denied because of a preexisting condition, but will come at a much higher premium.  
• A lapse in coverage over 63 days will result in a 30% premium surcharge.
• Medicare cuts will shorten coverage for seniors.
• Prescription drug costs are expected to significantly rise. 

Medicaid Cuts:
AHCA will reduce federal funding for Medicaid. Currently, the federal government supplements state Medicaid spending. 

• AHCA freezes Medicaid funding for 31 states, including New York, in 2020.
• Medicaid cuts will result in state funding gaps. States will need to cut the number of people covered by Medicaid, cut payments to providers (leading to decreased quality of care), or both.  
• As of 2020, the states will receive a per capita rate (a dollar amount per person on Medicaid) regardless of their actual needs or medical expenses. Per capita reimbursement has already led to providers exiting the marketplace.
• Eligibility re-determinations (recertification) will be required every 6 months instead of annually.

What You Should Do:

Asset protection planning is critical, now more than ever.  
 
Families need to plan ahead, well in advance of a health care crisis, to preserve assets and ensure the ability to access health care when needed.  Placing assets in an irrevocable trust is often the best place to start.  
Click here to learn more about trusts and asset protection planning.

We continue to monitor this proposed legislation and will keep you informed. 
As always, contact us if you have any questions. Our Elder Law attorneys are always available to address your questions and concerns. Call us at 631.390.5000 or click here.