Enzi Bill Would Save Billions by Fixing Loophole in Health Care Law

WASHINGTON, D.C. – Senator Mike Enzi (R-Wyo.), Ranking Member on the Senate Health, Education, Labor and Pensions (HELP) Committee, introduced a bill (S.1376)  to close a loophole in the Affordable Care Act that would have Americans with similar incomes, ages and medical histories paying very different amounts for private health insurance.  Senator Enzi’s legislation would fix that inequity and save more than $13 billion according to the Congressional Budget Office.  A similar bill was introduced in the House by Representative Diane Black (R-Tenn.).

“Earlier this year Medicare’s Chief Actuary, Richard Foster, noted that millions of early retirees would be eligible for Medicaid coverage because of a loophole in the recently passed health care law, which he said ‘just doesn’t make sense.’ I completely agree,” said Senator Enzi.  “My proposal would close this loophole and save $13 billion by ensuring that all income and eligibility for both Medicaid and insurance subsidies is counted under the new law.   More importantly, while saving our nation billions of dollars, this measure would not increase the number of uninsured Americans.  As our leaders struggle to find common ground to address our nation’s debt and spending, this proposal represents an area of savings where there is a rare opportunity for agreement on both sides of the aisle.”

Senator Enzi’s measure will fix the inequity because of this loophole and eliminate the disparity in insurance subsidies between early retirees and working individuals of the same age with the same overall income level, including Social Security benefits.  Full-time workers could pay nearly fifty percent more for their health insurance premiums, despite earning the same amount as early retirees, because of the more favorable treatment of Social Security benefits in the new health law.

Section 2002 of the Patient Protection and Affordable Care Act (PPACA) specifies how to determine an individual’s eligibility for Medicaid on the basis of income.  The new law excludes a large percentage of an individual’s Social Security income from the calculation.  This differs from most federal low-income assistance programs, which count Social Security benefits as part of an individual’s income.  As a result, retirees who earn up to $58,840 a year, including their income from Social Security, could now be eligible for Medicaid coverage putting an additional strain on the program.

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