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RPEC Weekly ACTION Newsletter – July 14, 2017

RPEC Weekly ACTION Newsletter – July 14, 2017

 

The Good News First – Social Security Beneficiaries May Get Biggest Raise in 6 Years 

From USAToday.com – Social Security beneficiaries are projected to receive a 2.2% cost-of-living increase next year, the most since 2011, the trustees who oversee the program said Thursday.

That would be about $30 a month for the average retired worker. But It’s a relative bonanza compared to the 0.3% adjustment for this year and the unchanged paychecks in 2016. The cost of living adjustments have been low because of unusually weak inflation in recent years.

Social Security officials will release the official cost-of-living increase for Social Security recipients in October.

 

Better Care Reconciliation Act (BCRA) – ACA Real/Replacement Bill – 7/13/17

Senate Revised Discussion Draft
Better Care Reconciliation Act (BCRA)
As Posted by Senate Budget Committee on 7/13/17
(Substantive changes compared to 6/26/17 version are in italics)

Summary of Key Provisions for Seniors

Medicare

  • Repeals the brand name drug fee. The revenue from this fee, which is paid by brand name drug manufacturers, is transferred to Medicare’s fund that pays for care received outside of hospitals. The fee is repealed beginning in 2018. (The House bill includes the same provision.)
  • Medicare spending would increase due to increased payments to Disproportionate Share Hospitals (i.e., those serving many low-income patients) in non-Medicaid expansion states. (Same as the House bill.)
  • Unlike the House bill, the Senate bill no longer repeals the additional Medicare tax on earnings above $200,000 ($250,000 for couples.)

Medicaid

  • Ends the Medicaid expansion by (1) preventing new states from adopting it at the ACA’s higher federal funding levels and (2) ending the additional federal funding for expansion enrollees, starting with a funding phase-down in 2020 that ends entirely in 2024. (The House bill phase-out generally ends January 1, 2020.)
  • Slashes Medicaid overall by ending guaranteed federal funding and replacing it with a fixed per capita amount in 2020 that is adjusted in future years at a rate far below the growth of actual enrollee costs, especially beginning in 2025 when amounts are adjusted for basic inflation only. States may choose funding through a block grant, in lieu of per capita amounts. BCRA exempts from the per capita caps or block grant certain expenditures related to a public health emergency. (The House bill includes per capita caps and an alternative block grant but the indexing in out years is greater, meaning the Senate bill cuts basic funding in the out years much more than the House bill.)
  • Provides $45 billion in state grants for the treatment of mental or substance use disorders. Not directly related to Medicaid, this provision provides funding of just under $5 billion per year from 2018 – 2026 to support substance use disorder treatment and recovery support services. (The House bill does not include this provision.)

Workers’ Health Plans (for retirees with employer health coverage)

  • Maintains the so-called “Cadillac tax” on high-cost health plans, delaying its implementation from 2020 until 2026. (Same as House bill)
  • Eliminates the employer shared responsibility requirement (a.k.a. the employer mandate) by zeroing out any employer penalties beginning retroactively in 2016. (Same as the House bill)
  • Allows creation of association health plans (referred to as “small business risk sharing

Individual Coverage

  • Imposes a 5:1 “age tax.”Insurance companies may charge older people five times what they charge young adults, compared to the ACA’s 3:1 limit.  (Same as the House bill.)
  • Bases the amount of help to pay for premiums on a formula that looks at the actual cost of coverage locally, a person’s household income, and a person’s age. BCRA’s approach is like that used in the ACA with the addition of variation based on age and a reduction in the income eligibility threshold to 350% FPL. Generally, younger people with lower incomes will get more financial help and older people with middle incomes will get less help and have to pay more out-of-pocket for premiums, compared to the ACA. (The House bill’s premium tax credits are flat dollar amounts based on age only, though the amount of the credit is phased out above certain income levels.)
  • Allows Insurers to Sell Off-Marketplace Plans Exempt from ACA Rules (a.k.a. the Cruz Amendment). Currently, insurers generally can only sell plans that comply with the ACA’s consumer protections (e.g., no preexisting condition exclusions, must sell to everyone, limits on out-of-pocket costs) regardless of whether the plan is offered in an ACA marketplace. BCRA permits insurers to sell non-compliant plans outside the ACA marketplaces so long as the insurer sells certain ACA-compliant plans in the marketplace. Linked to this, BCRA also includes a new pot of $70 billion in funding for states to pay insurers to cover high-risk individuals, in addition to the $116 billion provided to states separately for innovation and market stability. (The House bill does not include this provision.)

 

As you can see, we have much work to do in the weeks and months ahead to continue the betterment of your retirement security. Your continued support and political action is a necessity!

Your Voice for Retirement Security!

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