Study shows older, poorer Minn. residents would lose most under GOP health plan

WASHINGTON – Minnesotans who are older and less affluent would get significantly fewer tax credits from the new Republican national health care plan than they did with Obamacare.

That's the conclusion of a new Kaiser Family Foundation analysis. Kaiser found that Minnesotans who are 60 and making $50,000 or less would receive 25 to 75 percent less in tax credits under the American Health Care Act backed by President Donald Trump and the GOP House than under the Affordable Care Act, President Barack Obama's signature health care law.

By Kaiser's estimation, the Republican plan favors the wealthy and the young. Most Minnesotans 40 and younger who make at least $50,000 would see an increase in tax credits greater than 75 percent. Regardless of age, Minnesotans with incomes of $75,000 or more would benefit from the GOP plan.

Kaiser also measured the impact of the Republican plan on tax credits for Minnesotans ages 27 and 40 making $30,000 a year. Unless they lived in the 11 counties making up the Twin Cities and its near suburbs, all saw reduced credits compared to Obamacare.

Poor seniors did even worse, with 60-year-olds making $30,000 looking at having their credits cut at least in half no matter where they live in Minnesota.

Constituents reacting to the proposed changes have been bombarding congressional supporters of the plan with angry comments on social media.

On U.S. Rep. Erik Paulsen's Facebook post in support of the bill, one woman noted that the Kaiser study showed a 60-year-old living in Washington County earning $30,000 a year would receive $4,500 less in tax credits — less than half the amount under the current law.

Paulsen, a Republican representing the western Twin Cities metro, said he hears every day from constituents still upset about the negative effects of Obama's health care overhaul. "For too many, all they got was an insurance card ... but they have no coverage," he said.

He said the new GOP plan would give people more choices and lower costs, instead of forcing them into coverage they don't need or can't afford. He said the tax credits offer Minnesotans a freedom and flexibility they've never had.

A member of the House Ways and Means Committee, he has strongly come out in favor of the plan, touting its expansion of health savings accounts and continuing coverage of people with preexisting conditions.

One big difference between Obamacare and the GOP plan is that the Republican plan would let health insurance companies charge older Minnesotans as much as five times more for premiums than they charge younger customers. Obamacare limited the difference in premiums between old and young to three times as much. The Kaiser analysis does not include additional Obamacare subsidies paid to Americans who live at or near the poverty level.

The AARP, a seniors advocacy group, came out against the GOP plan this week. On Friday, the organization issued a report saying that adequate tax credits were important for older Americans to maintain access to affordable care. It suggested that the Republican plan raises significant concerns for adults between 50 and 64 years old. People are eligible for government-funded Medicare insurance at 65.

According to the AARP, 17,000 Minnesotans relied on tax credits to buy individual health insurance last year.

The Kaiser conclusions are in line with what most experts have concluded about the GOP replacement for Obamacare.

The biggest issue is how many Americans could lose coverage under the Republican plan, said Paul Van de Water, a former Congressional Budget Office official who specializes in health coverage at the Center on Budget and Policy Priorities. While the CBO estimate of those who would lose coverage isn't expected until early next week, Van de Water said that "it's clear it's going to be substantial."

Part of that is tied to a reduction in tax credits. The GOP plan and Obamacare both offer tax credits, but they are figured differently. Tax credits under Obamacare are based on the cost of health insurance in the area where people seek coverage. The credits are also tied to income so people making less money receive more help.

The Republican plan does not tie credits to cost of insurance. Nor does the GOP plan consider incomes except at the very highest levels — $75,000 for an individual, $150,000 for a couple — where credits begin to phase out. Beyond that, there's no distinction for income in the GOP plan, Van de Water said.

Washington and Lee University law Prof. Tim Jost, considered among the leading authorities on health care reform, said Republicans hoped to simplify the law by offering a flat tax credit based only on age.

"It is simpler to administer, but a lot less fair," Jost said. The Republican plan "will cover more higher-income and young people and fewer poor and older people."

The Republican plan does give extra tax credits to older Americans seeking coverage. But the credits are not enough to offset the GOP's willingness to let insurance companies charge seniors up to five times more than they charge young customers.

GOP Rep. Jason Lewis, a backer of the proposal, said that tax credits may fall for some because he expects the plan to lower premiums.

He also touted the proposed restrictions on Medicaid eligibility, saying they would bring the program back to its central mission.

Maya Rao • 612-673-4210