Commentary: Affordable Care Act Problematic for Seniors

By Toafa Nasio
Menifee resident

The Affordable Care Act seemed to be a welcomed relief for many in the beginning. With the promise of an expanded Medicare and no pre-existing conditions, the ACA appeared to address the needs of the aging population, including 55- to 64-year-olds.

However, as the ACA has rolled out, approximately 58 million U.S. adults may see those promises turn into penalties.

The ACA was intended to improve the quality and increase availability of health care to lower income individuals and those with medical conditions. To this end, the ACA was successful. The poor and disabled are included in the expansion of Medicaid. The ACA provides additional funding to participating states to cover adults who are under 65 with an income up to 133 percent of the federal poverty level.

This equates to about $16,105 a year for one person or $32,913 for a family of four, according to an AARP Public Policy Institute report. Only 13 percent of 55- to 64-year-old adults are covered by Medicare or Medicaid because the qualifications are narrow, however. You must either be within poverty levels or qualified by disability. The remainder of this group must be covered by employers (38.5 million or 65 percent), buy private insurance (4.1 million or 7 percent) or stay uninsured (8.9 million or 15 percent), which will result in a penalty (2 percent of your yearly income in the year 2015).

According to U.S. Bureau of Labor statistics, many 55- to 64-year-olds have remained employed because of significant losses to their retirement incomes due to the economic downturn. The economic crisis caused unemployment rates to rise to 8.5 percent for 55- to 64-year-olds, which is above the national average of 7.4 percent in 2013. The loss of employer-sponsored health coverage due to layoff, termination or retirement is problematic. Their income is based solely on what can be saved or the chances of re-entering the job market quickly.

However, there is a major obstacle for older workers in finding timely re-employment with the average duration of joblessness at 35.5 weeks. Re-entering the job market is challenging for health care benefits as many large companies are hiring mainly part-time employees to replace full-time benefit eligible individuals. Therefore, those who may be employed part-time or unemployed will have to shuffle through the private exchange for their health care coverage.

It is no secret that the cost of health care has gone up significantly. In 2007, 33 percent of people ages 55-64 were paying more than 10 percent of their gross income on health care premiums. This is twice as much as 18- to 49-year-olds. As premiums continue to rise in the current health care market, it will only force more income use on premiums and health care services.

As a result, 55- to 64-year-olds who do not qualify for Medicare (which is the majority) will be faced with a decision:

1) Pay private exchange rates and eat up more of their income.

2) Resort to being uninsured and suffer the ever-increasing governmental penalties.

There are two scenarios that illustrate this point.

In scenario one, a 55- to 64-year-old person who chooses to pay in the private market has a 67 percent chance of paying more than 10 percent in their incomes in just premiums. Although they no longer have to worry about pre-existing conditions stopping them from gaining health insurance, their premium price can increase to three times what young adults pay.

In scenario two, the 55- to 64-year-old decides not to purchase insurance because it is too expensive. They do not qualify for Medicaid and therefore can only hope that they do not get seriously ill. However, studies show that those without health insurance are at high risk for serious illness because they delay seeking treatment. Not only were they priced out of health care, they are penalized by the government yearly for non-compliance.

There are 8.9 million people living this scenario and making the decision daily to take the risk and suffer the financial and health penalties. Although the current ACA regulations do not offer relief to these individuals, there are solutions that can be offered.

First, for those 55- to 64-year-olds who choose to remain employed part-time, there should be additional subsidies or credits to assist with their health care premiums. Second, the health care premiums for this age group, regardless of employment, should not increase more than two times the amount of younger adults.

With these solutions in place, 55- to 64-year-olds can be free of penalties and believe in the promises of the ACA to take care of the aging population.

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