With the new Trump Administration’s promise to repeal and replace the Affordable Care Act (ACA or Obamacare), Congress is now considering partial repeal through the budget reconciliation process, to avoid a filibuster. The repeal maybe phased in over time, but no replacement plan has been defined. The budget reconciliation process only allows changes to components of the law with federal budget implications, which would allow for the elimination of the Medicaid expansion, the federal financial assistance for Marketplace coverage (premium tax credits and cost-sharing reductions), and the individual and employer mandates. It is unclear if the January vote to repeal without replace will pass. Some Republican Senators (such as Lamar Alexander R-TN and Susan Collins R-ME) have publicly expressed concern about voting to repeal in the blind without any replacement plan identified.
The Urban Institute has done an analysis of healthcare coverage and spending if the ACA is partially repealed through the reconciliation process, similar to the one passed last summer and vetoed by President Obama.
The Urban Institute projects that 184,000 West Virginians would lose healthcare coverage in 2019 under a ACA repeal, a 208% increase in the number of uninsured. This includes low-wage working West VIrginans would lose Medicaid coverage due to the elimination of Medicaid expansion, those for whom coverage becomes unaffordable due to the loss of premium tax credits, and healthy individuals who can afford coverage but are no longer required to purchase it. Without insurance, many West Virginians will put off seeking care until their condition is serious or even life threatening, and more expensive to treat. The ACA repeal could cause a growing number of medical bill bankruptcies that leave West Virginia families destitute
While the number of uninsured West Virginians would dramatically increase with the ACA repeal, a much smaller share of the uninsured would be eligible for financial assistance. Under a partial repeal through reconciliation, only 13 percent of the 272,000 uninsured West Virginians would be eligible for any financial assistance (all under Medicaid or CHIP), because of the elimination of both the Marketplace tax credits and the Medicaid eligibility expansion. In contrast, under the ACA, 71 percent of the remaining 88,000 uninsured would be eligible for either Medicaid/CHIP or tax credits through the ACA’s Marketplaces in 2019.
West Virginia would also stand to lose billions in federal funding with the repeal of the ACA. Under the ACA the federal government is projected to spend $35 billion from 2019-2028 funding West Virginia’s Medicaid/CHIP program, and $2 billion on premium tax credits for West Virginians. The a partial repeal of the ACA, federal funding for Medicaid would fall to $23 billion over that time frame, and the premium credits would be eliminated, a loss of $14 billion in federal funding. This loss of federal funding would threaten the state’s healthcare infrastructure and likely destroy jobs across the state.
In addition, as the number of uninsured increases, the amount of uncompensated care – the cost of health care for the uninsured and underinsured – would increase. Uncompensated care is paid for in a variety, some of it is financed by the federal government, some by state and local governments, some by the healthcare providers, and some of it is passed on to insured patients through higher costs. While the ACA reduced uncompensated care through coverage expansion, its repeal would dramatically increase the costs of uncompensated care for the healthcare system. Under current law, uncompensated care is projected to cost the healthcare system $656 billion over the next 10 years, with the federal government spending $262 billion, state and local governments spending $164 billion, and providers spending $230 billion. With a repeal of the ACA, uncompensated care costs would increase by $1.1 trillion over the next 10 years. However, federal programs must be increased to cover the additional costs above the current levels, which previous ACA repeal bills have not done. If no federal action is taken, state and local governments and providers would have to $1.1 trillion uncompensated care increase themselves.
The ACA, while not perfect, has become a foundation of health security for thousands of West Virginia families. Its repeal will have a significant impact on the state, as will any replacement plan, when it is defined. But as of now, tens of thousands of West Virginians stand to lose their healthcare coverage, while the state and the healthcare industry must prepare to lose billions in federal funding.
