Blog Posts > Repeal of ACA Would Shift $4 Billion in Costs to West Virginia State Budget
March 23, 2017

Repeal of ACA Would Shift $4 Billion in Costs to West Virginia State Budget

As the House of Representatives takes up repealing the Affordable Care Act (ACA) and replacing it with the American Health Care Act (AHCA), a new report by the Urban Institute finds that the AHCA if enacted would cut federal funding for Medicaid in West Virginia by $4 billion over 10 years. To make up for this shortfall, West Virginia would have to increase Medicaid spending by over one-third over the coming decade to avoid reducing Medicaid benefits.

The cuts to Medicaid come from the reductions in funding for the Medicaid expansion population under the AHCA, which covers approximately 175,000 West Virginians, and further reductions in federal funding to Medicaid through “per capita caps” that change the federal funding formula and reduce it over time.

Altogether, the Urban Institute estimates that federal Medicaid spending in West Virginia would be 9.8 percent lower between 2019 and 2028 than it would be under current law (ACA). A difference of $4 billion in federal Medicaid spending in West Virginia. If West Virginia would want to continue to covering the same population that it does currently, state spending would have to increase by 33.8 percent to make up for the federal reduction in Medicaid payments. This is the highest percentage increase than in all but four other states.

Over the course of a year, the Medicaid program provides health insurance to approximately 650,000 West Virginians (550,000 at any point in time). This includes children, people with disabilities, seniors, and low-income adults. As a result of the cost shift under the AHCA, West Virginia would inevitability have to reduce eligibility, provider payments, and benefits. The AHCA would also effectively end West Virginia’s Medicaid expansion, which provides health insurance to approximately 175,000 West Virginians.

West Virginia already faces a looming budget crisis of over $500 million next year, so passing the AHCA would ensure that the state’s dire fiscal times will continue as the state loses $4 billion in federal funds for Medicaid over ten years.

Preserving the structure of Medicaid is critical to all West Virginians and especially the one in three West Virginians that depend on it for their health and well-being.

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