MKH Statement on the American Healthcare Act (Trumpcare)

March 23, 2017

Dear Representative:

On behalf of the 2 million members of the Service Employees International

Union (SEIU), America’s largest healthcare union, I write to voice my strong

opposition to the American Health Care Act (AHCA). The AHCA will leave

millions of men, women, and children without access to high quality,

affordable health care. This legislation unequivocally jeopardizes working

families’ safety and financial security.

The goal of Congress should be to improve the lives of working families and

the American people. But it is clear that the AHCA does not do that and

instead jeopardizes the gains made under the Affordable Care Act

(ACA). The AHCA will leave millions of Americans without health

insurance and therefore without access to healthcare. At the time of this letter,

according to the nonpartisan Congressional Budget Office (CBO), 14 million

fewer people will have health insurance in 2018, and by 2026, 24 million

fewer people will have coverage compared to the current baseline under the

ACA. But with the added leadership amendments, these numbers could be

worse.

The AHCA decimates the Medicaid program, rationing and endangering

healthcare for children, seniors, people with disabilities, and their families as

well as for those who have gained coverage as a result of the Medicaid

expansion. According to the most recently available CBO estimates, the

legislation will cut federal funding for Medicaid by $880 billion over ten

years. Americans know that Medicaid is working and realize the key role that

the program plays in helping families afford care–including nursing home

care and home and community-based services for elderly and disabled

individuals. Nearly 1 in 5 Americans are covered under Medicaid and rely on

it to get health services. Under the AHCA, those Americans would lose

access to vital care that may mean the difference between life and death.

The AHCA would cap the amount of money states receive in Medicaid

funding from the federal government each year, regardless of the cost of

providing healthcare to those who qualify. Medicaid is already a lean

program, especially when measured on a per capita basis, and cuts from

capping federal funding will quickly force states to cut services, limit

enrollment, and decrease payments to hospitals and other providers. Medicaid

is also the largest payer for long term care in the country and pays for more

than 60 percent of all nursing home residents. Furthermore, Medicaid

provides more than 3.2 million Americans with home- and community-based

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long-term care, allowing many seniors and people with disabilities to remain in their homes

rather than move to an institutional setting. States—which must balance budgets and already face

fiscal pressures—will not be able to make up the lost federal dollars and will be forced to deny

care. The inevitable result will be that the AHCA will make it much harder and more costly for

older Americans, people with disabilities, and their families to get care.

The AHCA also includes an option for states to obtain a block grant for their Medicaid programs

for children and adults covered through the program. Block grants do not allow state Medicaid

programs to adapt in order to address changing needs due to economic downturns or health

emergencies. The block grant option would remove current protections designed to ensure that

this low-income population has access to care, instead allowing states to charge premiums and

cost sharing, with the result that people will forego crucial care because they are unable to afford

it. Moreover, because the amount of the block grant would inevitably not be enough to maintain

current services in future years, states will likely limit the coverage that they offer to children

and their families.

In addition, the legislation will effectively end the Medicaid expansion, which provides health

coverage to millions of people earning low to moderate incomes. While the bill purports to allow

states to maintain the expansion, states will only receive an enhanced match, or additional

funding, for people who enroll before 2020 and maintain continuous coverage. It is widely

understood that there is significant churn on and off the program in this coverage category, and

thus over time the reimbursement rates for states will drop. The resulting large cost shift to states

may lead them to eliminate coverage for this group altogether. In fact, seven states have triggers

that would end the Medicaid expansion in their state if federal reimbursement decreases.

Also problematic is the inclusion of provisions that would allow states to implement work

requirements for “able-bodied” adults. Proposals for work requirements could leave those who

are unable to work or struggling to find and retain employment without access to insurance and

past experience with such requirements in other public programs suggests that they would be

costly and administratively onerous to implement—dollars and time that could better be used to

provide actual health coverage. Approximately two-thirds of families with a member enrolled in

Medicaid are working already, and in fact, research demonstrates that work requirements do not

actually increase employment.

Finally, Medicaid provider rates are already extremely low in most states. Cuts to Medicaid,

capped funding, and elimination of the Medicaid expansion would lead to further reductions

in rates for providers, leading to job and other spending cuts in the health care industry that will

have ripple effects on the broader economy. We have serious concerns that hospitals, especially

those that serve communities that may not have access to many providers, could be forced to

close or cut back services, further reducing access to care in underserved areas.

Taken together, the AHCA’s Medicaid provisions will create significant holes in state budgets

forcing states to cut benefits, eligibility, coverage, and services not only in the Medicaid

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program, but in programs across state budgets to help make up the difference. For New York

State, these budget shortfalls are exacerbated by what some have labeled as a sweetheart deal,

the “Buffalo Bribe,” in order to gain the support for this flawed legislation. This deal will cause a

$2.3 billion hole in the New York State Medicaid budget that will only aggravate the adverse

effects of the cuts in funding the state will already face under the capped Medicaid system.

Those who purchase coverage in the individual market do not fare much better under the

proposed bill. The AHCA provides tax credits ranging from $2,000 to $4,000 to individuals to

purchase private insurance — substantially lower than the ACA’s current levels for the majority

of those who receive them. Unlike the ACA, it is unclear that people with access to employer

insurance that is unaffordable or inadequate will be eligible for credits, which would mean that

they will be left without access to coverage and care. The bill also creates an age tax on older

Americans by letting insurance companies charge people over 60 as much as five times what

they charge others for the same coverage. CBO found that under the initial bill introduced,

premiums for those between age 50 and 65 would sky-rocket. House leadership attempted to

mitigate the harm by adding an $85 billion dollar slush fund to the legislation for the Senate to

use to help offset costs for this population. However, the bill gives the Senate tremendous

amount of flexibility in how they may use this funding and in any case it is unlikely to be

sufficient to offset the soaring cost increases that people will face.

The AHCA would also repeal the individual mandate and instead allow insurance companies to

charge anyone who has a short lapse in coverage a 30 percent premium penalty for an entire

year. This provision is unlikely to fulfill its intent of encouraging healthier individuals to

purchase coverage, meaning that premiums will rise, creating further instability in the individual

market. It is also unclear what coverage will be available on the individual market or if the

current healthcare marketplaces will even still exist under this scheme. Between premiums and

out of pocket costs like deductibles, especially for those most in need of care due to pre-existing

conditions, illness, or age, the result could be higher costs for less coverage.

Another failure of the AHCA is that it hurts women by freezing funding to providers like

Planned Parenthood, risking the health and well-being of the 2.5 million people who rely on the

organization for basic care. One in five women in this country has visited Planned Parenthood

clinics and for many low-income women of color, including many of our members, Planned

Parenthood is their essential health provider. For these individuals, healthcare is not an

ideological struggle or about the politics of one policy versus another; it is a necessity that could

mean the difference between sickness and health. However this bill fails women who turn to and

trust Planned Parenthood for their healthcare needs.

The real winners of the AHCA appear to be special interests and the wealthy. The legislation

repeals most if not all of the ACA tax provisions for special interests like the pharmaceutical and

insurance industries, offsetting these costs with the massive cuts to Medicaid described

above. The bill also maintains the so-called “Cadillac tax,” which places a tax on workers who

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have robust health coverage, merely delaying implementation to 2026. Implementation of the tax

will punish people who have decent insurance, and will encourage employers to further shift

health costs to workers. Furthermore, the incentives for health savings accounts, which

encourage wealthier people to shelter pre-tax income, are of little use to working households

earning low-to moderate incomes.

Lastly, this bill was cobbled together on an expedited timeline that prioritizes politics over good

policy, transparency, and stakeholder and public input. With last minute changes being done to

the legislation, there is a cloud of uncertainty over the coverage numbers, premiums cost, and

numerous other factors that are necessary for the American people as well as members of

Congress to make an informed decision about the legislation. The American people have a right

to know what the AHCA will do to their healthcare, and the process to move this legislation has

deprived them of that transparency.

The AHCA is not care, it is chaos. The legislation creates an environment of uncertainty and

unaffordability for Americans and is a bad deal for working families. The bill radically

restructures Medicaid as we know it and cuts funding for the program significantly, endangers

women’s health, and further enriches corporations, special interests, and the wealthiest

Americans at the expense of working families’ access to healthcare and financial stability. The

American people will hold you accountable for how you proceed in this moment. We therefore

respectfully ask you vote no on the American Health Care Act when it comes to a vote in the

House of Representatives. We will add this vote to our legislative scorecard. If you need any

additional information, please contact Ilene Stein at Ilene.stein@seiu.org or (202)-730-7216.

Sincerely,

Mary Kay Henry

International President

MKH:IS:jf

opeiu#2

afl-cio, clc

 

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