The U.S. House of Representatives voted to pass the American Health Care Act and shifted the debate about the future of the Affordable Care Act to the Senate. It is unclear what the final product will be, or whether there will be a final product at all.
However, one thing has become clearer than ever in the days leading up to the vote: The debate about repealing and replacing the Affordable Care Act has been full of misinformation, deception and half-truths. Unfortunately, this has clouded the public discussion about the future of the U.S. health care system and has also prevented the American public from forming an informed opinion about the issues at hand.
I have published many articles critical of various components of the ACA. Yet, many of its problems are inherent in the larger U.S. health care system.
Higher premiums and limited choice are evident in the Affordable Care Act. Yet despite its many warts, the ACA has much to recommend it.
Unquestionably, it has brought tremendous relief to West Virginia through the Medicaid expansion and insurance marketplaces. Overall, more than 200,000 of our fellow residents have gained access to insurance, 22,000 of them able to enter into substance treatment programs. Our uninsurance rate is one of the lowest in the nation. An honest assessment of the American Health Care Act indicates that it would eliminate many of these gains.
Three components of the AHCA would be particularly damaging to our state.
First, the changes to the individual market (i.e. those individuals who have to purchase insurance on their own) would be devastating. Granted, some West Virginians, particularly those who are young and healthy and have high incomes, will financially benefit from the changes.
How many of these individuals are there? Take these two examples. A 60-year-old West Virginian living in Kanawha County making $40,000 per year will have to pay $13,500 more per year in insurance premiums. A 27- year-old, perhaps graduating this year from West Virginia University, making $20,000 per year will see his premiums increase by $2,000.
This does not even include out-of-pocket payments. And this does not address the fact that insurance plans will likely cover fewer services, potentially charge those with pre-existing conditions more, and many of the other intricate changes too complex to spell out in a few sentences.
How can most West Virginians come up with the additional money? The honest answer is they cannot and will not.
Second, the AHCA would all but guarantee elimination of the ACA’s Medicaid expansion in West Virginia and, for that matter, virtually any other state.
It is disingenuous to argue that the AHCA technically does not eliminate the expansion. While technically true, it would phase out the 90 percent federal match.
By 2020, the state is expected to pay about $50 million a year to match the federal contribution to the state’s Medicaid expansion under the ACA system. The AHCA would reduce the federal matching rate for new enrollees, more than doubling the state’s contribution.
A quick look at the current budget situation in Charleston makes that a challenging proposition. How can a fiscally challenged state like West Virginia expect to further increase its contribution? The honest answer is that it cannot and will not.
Third, and most importantly, the unprecedented changes to the overall Medicaid program hold the potential to cause the most harm to our state.
Historically, the federal government has extended an open-ended commitment to states to match their spending on Medicaid. For West Virginia, that match is currently just below 75 percent. This means that for every dollar the state spends on Medicaid, the federal government adds another $3.
The AHCA changes this dramatically by giving the state a certain amount of funding per enrollee. While adjusted for inflation, this per capita funding arrangement will not keep pace with the growing demands of our state’s population which tends to be older, sicker and more disabled than the rest of the country. Not surprisingly, this arrangement will cut the Medicaid program nationwide by $800 billion — a dramatic 25 percent cut to the program.
Confronted with higher costs to the state, how can West Virginia maintain both eligibility and benefit levels? The honest answer is that it cannot and will not.
The U.S. health care system is in dramatic need for reform to put patients first, reduce costs and improve quality. The American Health Care Act, unfortunately, does none of this.
Simon F. Haeder is a political science professor in the John D. Rockefeller IV School of Policy & Politics at WVU.