January 12, 2017
A Glimpse into What Repealing the Affordable Care Act Could Cost Virginia
Repeal of the Affordable Care Act would bring significant increases in the number of people without insurance and the loss of both substantial amounts of federal funding and important insurance protections for millions of Virginians.
New estimates from the Urban Institute indicate that if a repeal bill was to be passed and signed by President Trump, ending most provisions of the Affordable Care Act by 2019, 685,000 Virginians would lose their health coverage, leading to a 79 percent increase in the number of uninsured. Key drivers of this marked increase are the disruptions to the nongroup insurance markets and the loss of Medicaid coverage. This would bring the total number of uninsured to over 1.5 million state residents.
This would be a major departure from trends in recent years in Virginia that have seen substantial drops in the number of people without insurance.
In 2013, a year before the major coverage provisions of the Affordable Care Act (ACA) went into effect, there were just under a million Virginians without health insurance. After the implementation of the Affordable Care Act – and even without Medicaid expansion–that number fell to 746,000 – a 26 percent reduction.
A key provision in the Affordable Care Act allows young people between the ages of 18 to 26 to remain on their parents insurance plans. Around 59,000 Virginians in this age group have insurance due to this provision, leading to a 63 percent reduction in the number of Virginians in that age group with no health insurance. Repealing this provision would cut health insurance from a large number of these young adults.
In addition, Virginia would likely see a reversal in the recent uptick in employer sponsored insurance. In 2014 and 2015, for the first time in years, there were increases in the share of non-elderly Virginians with health coverage through employer-sponsored insurance. This increase has likely been spurred on by provisions in the Affordable Care Act that began in 2015, requiring more businesses to offer insurance to their employees or pay a fine. More than half of all Virginians under 65 receive their health coverage through employer sponsored insurance. Repealing this ACA requirement would have a significant effect on the state’s coverage rate.
To make matters worse, low- and moderate-income working Virginians would feel the brunt of the pain.The Urban Institute estimates that 82 percent of Americans losing insurance coverage would be members of working families. Americans without college degrees, who have the most difficulty finding a job that offers health insurance, would account for about 80 percent of the newly uninsured.
For example, moderate-income Virginia families with coverage through the insurance marketplace would lose important benefits. In 2016, the average premium tax credit for moderate-income Virginians was $276, which covered around 75 percent of the cost of insurance. In Virginia, 326,000 individuals receive these tax credits to purchase insurance. Removing this part of the ACA would push many of these families off of the insurance they just got.
Most Virginians would also lose important insurance protections that have been a key part of the ACA. Virginians benefited from changes to insurance rules such as a ban on discrimination based on pre-existing conditions (which nearly half of Virginians have); an end to annual and lifetime limits (meaning insurers can’t drop a customer when they need their coverage the most); free preventative care (like flu shots and cancer screenings); and a ban on charging women more for coverage because of their gender.
These provisions have meant improved health outcomes and greater economic security for families across the state. Backtracking on these important protections would put all Virginians at risk, especially low-income families struggling to get by.
All Virginians Will Feel the Pinch
With the implementation of the ACA, there has also been a slow down in the growth of health care costs. In the decade prior to the ACA’s passage, premiums grew at 7.6 percent, compared to only 4.8 percent from 2010 to 2015. Virginia families would be paying $3,400 more today if that growth had remained the same.
Furthermore, like all states, Virginia would face heavy economic losses from repeal. In 2019, Virginia is projected to see a drop of about $1.4 billion in federal subsidies for Virginians’ marketplace health plans. The Commonwealth Fund estimates that Virginia could lose 27,000 jobs from the elimination of premium tax credits if you take into account the extra spending and related jobs that are supported by the federal credits.
The state budget would also likely see substantial losses. The Department of Medical Assistance Services estimates that during fiscal years 2018 and 2019, Virginia would lose $314.4 million in federal Medicaid funding. This estimate assumes that the state would eliminate the Governor’s Access Plan, which provides limited medical and behavioral health care coverage to low-income Virginians with serious mental illness. If the state wanted to maintain this program, the losses to the state budget from the elimination of the ACA would be even greater.
And when patients can’t pay for their care, it costs all of us. If the ACA were rolled back, some newly uninsured Virginians would go without care, and many would be forced to seek care despite being unable to afford it. This has serious consequences both for families – medical bills are a leading cause of bankruptcy – and communities. And when those families can’t pay the bills, providers look to the state or other patients to make up the difference. In Virginia, these uncompensated care costs are expected to increase by $190 million in the first year alone. That’s why it can cost all of us when less federal funding is available to help Virginians afford health insurance.
Repealing the Affordable Care Act without replacement would be a huge step backwards for our economy and the health and economic security of low and moderate-income families throughout the commonwealth. There have been major strides in providing improved and accessible health coverage to millions of Virginians since the passage of the Affordable Care Act. Preserving the gains made and improving upon them through any potential “replace” bill needs to be a top priority for Congress.