Indiana Economic Digest | Indiana
Advanced Search

• Most Recent




home : most recent : vigo April 29, 2017


3/19/2017 6:30:00 PM
GOP health care plan could hit Wabash Valley hard, Rose-Hulman economist says
Rose-Hulman Institute of Technology professor Dale Bremmer goes over the numbers related to the proposed health care law with his students during a class on Thursday. Staff photo by Austen Leake
+ click to enlarge
Rose-Hulman Institute of Technology professor Dale Bremmer goes over the numbers related to the proposed health care law with his students during a class on Thursday. Staff photo by Austen Leake
By the numbers
Health insurance costs in Vigo and surrounding counties based on proposed tax credits relative to current federal marketplace subsidies:

Age 60, $20,000 income - $4.410 increase (52 percent)

Age 60, $40,000 income - $1.290 increase (24 percent)

Age 27, $20,000 income - $600 increase (25 percent)

Age 27, $40,000 income - $2,000 decrease (no current subsidy)

Source: Kaiser Family Foundation



Dave Taylor, Tribune-Star

The Wabash Valley may be especially hard hit by the Republican health care plan pending in Congress.

“In this part of Indiana, we have lower incomes, a higher elderly population and a medical hub,” said Dale Bremmer, professor of economics at Rose-Hulman Institute of Technology. Many residents may be unable to maintain health insurance under the GOP proposal, he said.

U.S. Rep. Larry Bucshon, R-Newburgh, insists the plan “is not a finished product,” and “the cost for everyone will come down” once all phases of a three-tier initiative to repeal and replace the Affordable Care Act are in place.

But the American Health Care Act is what is before lawmakers now, and an analysis by the Kaiser Family Foundation found it could more than double the cost of health insurance for some residents of Vigo and surrounding counties.

A 60-year-old making $20,000 per year who gets a more than $8,400 health insurance subsidy under current law would instead receive an income tax credit of $4,000 under the proposed bill. A person the same age earning $40,000 annually would receive a tax credit nearly $1,300 less than their current subsidy.

“Older adults already pay more for health care, and this proposal allows insurers to charge them even more,” said Sarah Weddle, state director of AARP Indiana.

“This is an age tax on older Hoosiers … The legislation shortens the life of Medicare, leaving the door open to benefit cuts down the road. I don’t believe this is something Hoosiers want to see happen.”

The Indiana Hospital Association is also concerned, noting that 20 million Americans have insurance because of the Affordable Care Act.

“This has provided a ‘safety net’ for hospitals financially,” said association President Doug Leonard. Pending legislation, if passed, would result in losses for many hospitals, putting them in a precarious position, he said.

“In many rural areas, hospitals are among the largest employers and provide many community benefits,” Leonard said. “We cannot afford to see that deteriorate.”

Bucshon countered that some provisions of the current law “were not actuarially sound … It has driven up the cost for younger people so they didn’t enroll. Subsequently it has driven up the cost for everybody.”

Health care expenses for older patients are about five times higher than for 20-somethings, Bucshon said, explaining why the proposal allows insurance rates up to five times higher for older customers. Current law limits age-based premiums to three times the cost of younger people.

Gov. Eric Holcomb has expressed concern about the state’s Medicaid expansion, HIP 2.0, offshoot of the long running Healthy Indiana Plan. HIP 2.0 covers 415,000 Hoosiers and has boosted total Medicaid enrollment to more than 1.4 million, an increase of 300,000 since its launch in 2015.

“Those citizens on the Medicaid expansion are not going to lose their coverage,” Bucshon said. A 90 percent federal subsidy for current patients would continue until a future date, currently 2020 but subject to change, he said.

New patients would also be covered at 90 percent through 2020 but subsidies for those enrolled in later years would be 69 percent, the standard Medicaid rate, Bucshon spokesman Nick McGee later clarified.

While the GOP is touting a Congressional Budget Office estimate of $337 billion in savings over 10 years, said Bremmer, who teaches a class on health economics, “If we’re jumping up and down because it’s a deficit reduction plan, it’s a drop in the bucket. We better should be jumping up and down in terms of what does this do to people who need access to care.”

The annual savings works out to about 4 percent of the federal deficit or barely 1 percent of total annual U.S. health care expenses, he said.

The health care overhaul is being considered using a process known as reconciliation “because it allows us to get the bill through the Senate,” McGee said. The process requires the bill to be revenue neutral or save at least $2 billion. It requires only a simple majority of 51 votes in the Senate rather than 60 that would otherwise be required for a budget bill. “On a bill repealing Obamacare, w’re probably not going to get any Democrats,” he said.

The second phase of the three-tier process would involve administrative changes by the Trump Administration, Bucshon said. The third phase involves additional legislation addressing the sale of insurance across state lines, restricting lawsuits and monetary awards and allowing small businesses to pool resources and compete for lower cost insurance. Those areas are not related to the federal budget and thus could not be considered under reconciliation.

Related Stories:
• IU expert: CBO report could threaten health plan
• EDITORIAL: Obamacare led to HIP 2.0, and plan deserves support
• Gov. Eric Holcomb wants federal funds for Medicaid expansion in Indiana
• EDITORIAL: Proposed health care plan would harm many Americans
• Legislative public forum brings hoots, jeers at Posey County forum
• EDITORIAL: Indiana's HIP 2.0 offers better course for fixing health care
• Trump's proposed budget cuts would hurt poorest most, says Evansville official

2017 Community Newspaper Holdings, Inc.






Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR


Software © 1998-2017 1up! Software, All Rights Reserved