Who Are the West Virginians Who Would Lose Coverage Under ACA Repeal?

A recent WVCBP report looked at many of the people who could lose health coverage from the repeal of the Affordable Care Act – including small business workers and those working in various industries. Last week, the Urban Institute released state fact sheets with more demographic information on this population – with details on income, age, race, education, and employment status.

Of the estimated 184,000 West Virginians who would lose coverage from repealing the ACA, 84 percent have incomes below 200 percent of the federal poverty level – which is considered the amount of income a typical family needs to make ends meet. Approximately 44 percent of those that could lose coverage are below the federal poverty line, which was $24,300 in 2016. If the ACA is repealed, the share of those below the federal poverty line without health insurance would grow fourfold, from 7 percent to 28 percent, according to the Urban Institute.

blog post aca repeal working families

Repealing the ACA would especially impact those in West Virginia without a college degree. Of the 171,000 adults who would lose coverage, 90 percent do not have a college degree. Approximately 91 percent are white, while 5 percent are black and 2 percent are Hispanic.

Among West Virginians who are expected to lose coverage, 73 percent are in working families. This figure is even higher for some families: 79 percent of children and 80 percent of parents who would lose coverage are in families with at least one worker.


Affordable Care Act Repeal Threatens Health Coverage and Economic Hardship in West Virginia

A new West Virginia Center on Budget and Policy report shows the far-reaching effects of an ACA repeal in the Mountain State. Read.

The report shows West Virginia will be one of the most heavily impacted states by an ACA repeal. West Virginia will lose an estimated $349 million over five years in state and local taxes as a result of reduced economic activity generated by the ACA and the state’s budget crisis could worsen if ACA provisions that provide direct savings to the state are repealed among other negative impacts.

The WVCBP believes Congress and the President should build on the progress that has been made through the ACA. Any actions taken should carefully consider the impact they have on the number of uninsured and on health-care costs.

This WVCBP blog takes a look at a potential approach — the Patient Freedom Act of 2017 — to replace the Affordable Care Act. Read.

Based on what is known, the proposal shifts major decisions about how to respond to a repeal of the Affordable Care Act. At the same time, states will have less federal dollars to help subsidize the cost of health insurance and preserve gains made under the ACA.

Ultimately, the proposal leaves a variety of important questions unanswered.

In the News
This Bluefield Daily Telegraph story takes us to the nation’s capital city where U.S. Rep. Evan Jenkins (R-W.Va.) is fighting for more support to help out-of-work coal miners. Read.

The bill — Assisting America’s Dislocated Miners Act — if successful would establish the Dislocated Miners Assistance Program under the U.S. Department of Labor. The move would also provide $20 million per-year over five years to fund the program.

The WVCBP welcomes the effort by Congressman Jenkins and believes it could help diversify West Virginia’s economy.

Governor Jim Justice told a group of lawmakers and business owners the state’s budget gap is expected to reach $700 million in FY 2019. Read.

Justice went on to tell the Register-Herald that many of the “low-hanging fruit” have already been taken and further dips into the state’s Rainy Day Fund would be disastrous for the state’s bond rating.

The WVCBP looks forward to the new administration working with legislators to come up with real budget solutions that do not negatively impact West Virginians and the vital services they use daily.

Upcoming Events

Register for the WVCBP’s upcoming Budget Breakfast by Tuesday, January 31 to enjoy an early bird discount rate. The event slated for Feb. 23 will feature remarks by the Governor’s Chief of Staff Nick Casey and Senator Mike Hall. Register here.

Protect West Virginia will host a Budget Boot Camp on Wednesday, February 1, 2017 at the Girl Scout Black Diamond Council building in Charleston.

Citizens are welcomed to join Protect West Virginia, Our Children Our Future, West Virginia Development Hub, and others to discuss the state’s on-going budget woes, how it impacts their daily lives, and how to take action from there to Protect West Virginia. More info on the event may be found here.

What We Are Reading…

– If you don’t think progressives and conservatives can find ways to work together to reduce income inequality, check out these eight market-oriented policy proposals that our friend Dean Baker published for the conservative American Enterprise Institute.

– And if you don’t think there is hope for Appalachia in the Trump-era, think again says former coal-miner Nick Mullins in this piece from the Huffington Post.

– If you are interested in economics and are looking for a place to study, discover, participate, and orient yourself in pluralist economics go to this new interactive website called Exploring Economics. Listen to Mariana Mazzucato give a Ted Talk about how government plays an important and large role as an investor and innovator.

Proposed ACA Replacement Approach Leaves Important Questions Unanswered

U.S. Senators Shelley Moore Capito (R-W.Va.), Bill Cassidy, MD (R-La.), Susan Collins (R-Maine), and Johnny Isakson (R-Ga.) unveiled the outline of the Patient Freedom Act of 2017, a one-page document describing a proposed legislative approach that could follow the repeal of the Affordable Care Act. However, the proposal raises serious questions and leaves important questions unanswered.

Based on what is known, the proposal shifts major decisions about how to respond to a repeal of the Affordable Care Act. At the same time, states will have less federal dollars to help subsidize the cost of health insurance and preserve gains made under the ACA. This West Virginia Center on Budget and Policy report takes a deep dive into what West Virginia will lose with an ACA repeal.

States have two options with federal assistance and a third option with no federal assistance under the proposal:

States Can Keep Some ACA Provisions But With Significantly Less Federal Dollars 
– The total subsidy dollars West Virginians receive through the ACA Marketplace would be cut. Ninety-five percent of the federal premium tax credit and cost-sharing subsidy dollars would be avaiable. It is unclear if those federal dollars would keep pace with inflation or if purchasing power will shrink dramatically over time. It is also unclear if federal dollars will increase if more people become eligible to receive subsidy dollars.
– The fate of federal dollars that support Medicaid expansion is also unclear. The proposal fails to outline if the current Medicaid federal matching dollars partnership would continue or if only a limited amount of federal money would be available.

States Use Federal Dollars To Create Health Savings Accounts
– States can take the reduced federal support and deposit a limited amount of money into eligible individuals’ Roth Health Savings Accounts to purchase a high-deductible health insurance plan. The states will administer this.
– Eligibility guidelines for qualifying for health savings accounts as well as the amount of money per person is murky.
– While the option for states to continue Medicaid expansion appears intact, it is unknown if the current financial partnership will continue or if the federal dollars will be limited or keep up with inflation.
– States have the option to discontinue the Medicaid expansion and put an allotment of dollars into health savings accounts. Lower-income West Virginians could put that money toward high-deductible plan premiums.

It is unknown if consumer protections, such as prohibiting insurance companies from charging higher premiums to any person with pre-existing conditions, based on gender or age, or other factors used as a basis to charge higher premiums pre-ACA, will remain under the above options.

Additionally, the proposal appears to eliminate requirements that insurance companies spend a specific portion of the plan premiums on health-care benefits rather than administrative costs and profits. 

Finally, the individual mandate requiring everyone to purchase health insurance will be repealed. This will drive up insurance premiums for those who do buy insurance as those without insurance prolong seeking treatment and going the insurance pool. An Urban Institute report describes the impact of an individual mandate repeal on the private insurance market and the ACA Marketplace. Urban estimated the individual market would be near collapse, with a 92 percent reduction in enrollees coupled with a dramatic increase in premiums, undoing the progress made in making this market accessible and affordable.

ACA Repeal Increases Federal Budget Deficit

We know that repealing the Affordable Care Act will increase the number of uninsured Americans by tens of millions. We also know it will significantly raise premiums for people who purchase health insurance in the individual market (people without employer-based health insurance and who are not eligible for Medicaid or Medicare). Read.

Members of Congress who care about the size of the federal budget deficit should take note that repealing the ACA also could significantly increase the federal budget deficit.

In June, 2015 the Congressional Budget Office of the U.S. Congress analyzed the budgetary effects of repealing the ACA and estimated that it would increase federal budget deficit by $137 billion over the 2016–2025 period.

ACA deficit

ACA Repeal Restores Tax Breaks for the Wealthy
Among other reasons for the impact on the deficit, the prior ACA repeal bill vetoed by President Obama immediately provided a tax cut to individuals with incomes over $200,000 and couples with incomes over $250,000 a year.

Low- and moderate-income people pay Medicare taxes on all of their income. However, before the ACA, higher income people did not pay taxes on all of their income. The ACA ended this inequity in Medicare taxes.

An ACA repeal would restore this Medicare tax break for the wealthy:
– Millionaire household would receive a tax cut on average of $49,370 a year
– For multimillionaire tax filers – with incomes above $3.8 million a year – the average tax cut would be $195,000

ACA tax cuts

Without this and other revenue in the ACA, any replacement plan can only leave more people without insurance and others with higher premiums and copayments.


Further Analysis Confirms Potential Harm Of ACA Repeal

Yet another analysis confirms the potential harm of repealing the Affordable Care Act. The Congressional Budget Office and the Joint Committee on Taxation examined the impact of the repeal bill passed by Congress in 2015 and 2016 (H.R.3762).

Tens of Millions Would Lose Health Care Quickly
– 18 million more people would be uninsured in the first year after repeal
– 27 million people would be uninsured after repeal of the ACA marketplace premium subsidies and the Medicaid expansion
– 32 million people would be uninsured by 2026

ACA blog
Premiums in the Individual Health Insurance Market Would Increase Dramatically
– 20 to 25 percent increase in premiums in the first year after repeal
– 50 percent increase after repeal of the ACA marketplace premium subsidies and the Medicaid expansion
– Premiums would about “double by 2026”

ACA Repeal Will Cause Chaos in the Nation’s Individual Health Insurance Markets
– For people without employer-based coverage or public health insurance, it could mean no insurance options are available to them 
 About half of the nation’s population lives in areas that would have no insurers offering coverage in the individual market in the first year after repeal

– By 2026, three-quarters of the population would have no insurers

The West Virginia Center on Budget and Policy will release an Issue Brief that outlines the potential risks of an ACA repeal to West Virginians next week. 






Tackling West Virginia’s Budget Crisis

In less than a month, West Virginia’s new governor, Jim Justice, will release his FY 2018 state budget that aims to close an estimated budget gap of $497 million or about 11 percent of the state general revenue fund (before leaving office outgoing Governor Tomblin released a FY 2018 state budget).

While Governor Justice has said “we have to raise revenue,”  the GOP controlled legislature has vowed they will not enact any tax increases and seem more inclined to push for more tax cuts, such as eliminating the business personal property tax that would reduce state and local revenues by $388 million. In order to tackle West Virginia’s budget crisis effectively, it is important to understand how the state landed in this crisis. We need to look at the spending side and the revenue side of the ledger.

Big Budget Cuts Over Last Five Years

West Virginia’s budget problems are nothing new, the state has had sizeable budget gaps that have ranged from $75 million in 2014 to over half-a-billion in 2016. Over this time, lawmakers have cut millions out of the budget each year. Former Governor Tomblin estimates that the state has cut over $600 million from the budget over the last five years alone. Between 2012 and 2017, the only two major expenditure increases have been in Medicaid (mostly due to growing healthcare costs and utilization) and foster care services (mostly due to substance abuse and expensive out-of-state placements) while most agencies have been severely cut (e.g. Higher Education has been cut by over $55 million since 2012). All together, general revenue fund expenditures have grown on average by less than 1 percent annually since 2008.

Tax Cuts and Weak Energy Markets Have Severely Depressed Revenues

If we look at general revenue fund collections between 1990 and 2007 – before major tax cuts where enacted – they average about 6.8 percent of our state’s economy or total personal income. Today, they are just below 6 percent. If general revenue collections were at the historical average of 6.8 percent, the state would have about $628 million in additional revenue. This is pretty close to what Tomblin said we’ve cut from the budget since 2012.

If you adjust for inflation (CPI), estimated general fund revenue collections for the current fiscal year (FY 2017) are down about $570 million from where they were in 2008. If you look at general revenue collections during the first six-months in FY 2017, they are at the same level today as they were nine years ago (FY 2008). Either way you cut it, it seems pretty clear that West Virginia is collecting far less revenue than it should be. In other words, we have a major revenue problem – not a spending problem.

The state’s revenue problem stems from two primary factors, one that’s self-inflicted and one that is not. In 2007, the state started a series of tax cuts. The cuts totaled at least $425 million annually.  This includes phasing out the grocery tax on food and the business franchise tax, while lowering the corporate income tax rate from 9 percent to 6.5 percent.

While the business tax cuts were sold on the idea that they would boost jobs, the state had more private sector jobs before the business tax cuts than we do today. In fact, one of the only areas of private-sector job growth over the last 10 years has been in health care services, which is mostly because of our growing elderly population and the infusion of federal money from the Affordable Care Act.

The other major factor has been the decline in the coal industry – which was foreseeable at least back to 2011 – and the major drop in natural gas prices. Both of these energy industry factors have not only suppressed severance taxes (state severance taxes are down $243 million between 2014 and 2016), but have also lowered other revenues at the state and local level.

On the coal side, production has dropped from 158 million tons in 2008 to an estimated 80 million in 2016. The stems from stiff competition from cheaper and more abundant natural (shale) gas, a huge decline in coal mining productivity in southern West Virginia (thinner coal seams),  increased competition with Western coal in Wyoming and Illinois, sluggish international metallurgical coal markets, and growing demand for cleaner energy at the federal (EPA regulations) and state level (renewable energy portfolio standards).

In summary, because of major tax cuts and a weak energy sector the state has seen a large drop in revenue collections that have resulted in hundreds of millions in budget cuts over the past several years.

Closing the $500 Million Budget Gap

Going forward, it is clear the state will have to raise revenues in order to pay for vital public services such as schools, roads and bridges, public safety, and health care. This could include applying the sales tax to cell phones ($70m), digital downloads ($4m), grocery items ($170 million), and more personal services ($5.8m) while also increasing the sales tax rate to 7 percent from 6 percent ($200m). Other revenue options could also include raising the natural gas severance tax rate to 6 percent from 5 percent ($19m), reinstating the state estate tax ($20m), adding a 3 percent income tax surcharge on incomes over $200,000 ($96m), and reinstating the business tax cuts ($219m).

The good news is that a large majority – 70 percent – of West Virginia voters are willing  to pay more in taxes if the money goes toward maintaining these key priorities.

While it is unclear how lawmakers will close the nearly $500 million state budget gap during the 2017 legislative session, a cuts only approach would be devastating to vital public programs and services that all West Virginians rely on each day. The most prudent approach would be to raise revenues and then set in motion some long-term government reforms (e.g. criminal justice reforms) that could  reduce expenditures over time and improve our workforce. If we continue to just cut and our public structures continue to deteriorate, there is a good chance more people will leave the state and far less will make our state their home.


A Look At Drug Courts In West Virginia

This working policy brief by West Virginia Center on Budget and Policy intern Luke Yingling explores drug courts in West Virginia, including outcomes, savings, and the potential to expand their presence in the Mountain State.

A Look At Drug Courts In West Virginia
The traditional criminal justice system often produces poor outcomes for drug-addicted offenders, failing to address underlying symptoms fueling criminal behavior. In an effort to curb demand for illegal substances while also reducing re-arrest rates, alternative sentencing methods involving substance abuse treatment were devised in the late 1980’s.

Miami-Dade County, Florida created the nation’s first drug court in 1989, intended to funnel drug addicts away from incarceration and toward rehabilitative programs. Drug courts are the marriage of probationary and mental health principles, intended to reduce recidivism by halting drug abuse.

West Virginia’s northern panhandle established the state’s first adult drug court programs in 2005, with programs in Brooke, Hancock, Ohio, and Marshall Counties. Since then, adult drug courts have proliferated across the state, graduating 1,002 participants since their conception. With 31 distinct drug courts currently serving 46 West Virginia counties, the state aims to ensure that they are treating program participants, also called clients, who are likely to recidivate without intervention and rehabilitation.

Who’s Eligible for Drug Courts?
In accordance with West Virginia Code §62-15-6, West Virginia Adult Drug Courts accept felony offenders who have committed a non-violent crime stemming from their habitual drug use. West Virginia’s Adult Drug Courts accept high-risk, high-need clients, mandating that all potential program participants are administered the Level of Service/ Case Management Inventory (LS/CMI). The LS/CMI aims to assess the likelihood that a client will reoffend without intervention and treatment, also serving as tool for tailoring specialized case management plans. Acceptance into a drug court program is ultimately contingent upon a referral to the program.

Impacts on Recidivism and Cost Savings
Drug court programs reduce recidivism through a concerted rehabilitation effort involving law enforcement, case management specialists, treatment specialists, prosecutors, defense attorneys, and community members. Participants are monitored, randomly tested for illicit substances to assure they maintain sobriety, and are in regular contact with their treatment supervisors, probation officer, and drug court judge. A treatment strategy is tailored for each client, intended to address their specific needs.

As of 2013, the most recent year that West Virginia Adult Drug Court cost and recidivism data was released, a year stint in prison cost $24,000, the same period of time in jail cost $18,250, and a year in drug court cost $7,100. Considering the cost of jail as of 2013, if the 1,002 drug court graduates had served a year sentence in jail rather than an equal term in drug court, the cost savings would total more than $11 million. Yet, these are only the direct program savings and do not consider the larger, long-term estimated range of savings that are primarily owed to reduced recidivism rates.

A meta-analysis of probationary programs that focus on treating high-risk clients, tailoring case management programs to suit the specific needs of that client, found that those programs typically yield a return of $3.42 for every dollar invested. The programs studied utilized “Risk Need Responsivity” principles, such as the LS/CMI used in West Virginia Adult Drug Courts, to identify high-risk clients and create programs that can best address the symptoms fueling their criminal behavior. Because West Virginia Adult Drug Courts have graduated 1,002 participants, spending $7,100 per participant, per year, the Mountain State and its counties may have saved more than $24 million since the programs were introduced, based on the findings of the study.

Issues and Recommendations
A portion of the cost savings experienced by drug courts is derived from a client’s diversion from a more costly incarceration in jail or prison and their less costly placement in drug court. At least theoretically, it is conceivable that an individual would plead guilty to a charge in hopes of being referred to drug court, where they could have that charge expunged (in the case of misdemeanor charges) or reduced to a lesser charge upon completion of the program. However, acceptance is contingent upon a referral and there is no guarantee of a referral.

Some criminologists contend that long-term, inpatient treatment is the preferable rehabilitative strategy, not drug courts. One issue, according to some researchers, is drug court’s punishment and potential dismissal from the program for drug relapses. Treatment specialists assert that many clients break from sobriety multiple times in the process of spurning their habitual drug use and that dismissal from rehabilitative programs for that reason is counterproductive.

Additionally, minorities are underrepresented in drug court programs nationally (data specific to West Virginia is not available). Understanding that drug courts lack diversity at the national level West Virginia’s judges, public defenders, defense attorneys, law enforcement, and prosecutors must make a conscious effort to refer minority clients.

Lastly, if West Virginia were to enhance its data infrastructure and collection they might be able to do a better job of providing substantial data on their courts, making it possible to perform more extensive cost savings analysis on their programs. While it is possible to calculate direct savings from the program, long-term savings from recidivism and other factors is difficult to exactly determine given the lack of available datum.

A meta-analysis of drug courts nationwide reveal that programs are only serving about one half of the total eligible population and only 5 percent of all offenders with substance abuse issues. An additional investment of $5 million, assuming that all dollars are allocated toward expanding program capacity and treating new clients, may result in the graduation of an estimated 360 new participants (considering the 52 percent program graduation rate).

Those 360 graduates processed through drug court rather than jail may save upward of $4 million  in direct savings and nearly an estimated $9 million in long-term savings. Therefore, increasing the adult drug court budget an additional $5 million may yield a return of $13 million (on top of the previously estimated $10-30 million).

Citizens who hope to see drug court programs granted the additional funding they need to treat a higher volume of clients and save West Virginia tax payers additional dollars can speak with their representatives about taking action if the Supreme Court fails to increase funding for drug court programs.

Judge Patricia Keller
Professor Kara Fisher, University of Charleston
Professor Hallie Dunlap, University of Charleston




West Virginians Support Tax Increases for Schools, Public Safety, Roads and Bridges

A West Virginia Center on Budget and Policy statewide poll shows seventy percent of West Virginians are willing to pay more in taxes to protect funding for education, public safety, and roads and bridges. Read the story here.

Continued cuts to vital services citizens use daily will cause even further harm to our communities and state’s future. Together we must hold lawmakers accountable for real budget solutions that don’t leave West Virginians behind. Join our coalition to Protect West Virginia today!

protectwv-smallIn The News

Brad McElhinny writes about early disagreements between state Republicans and Democrat Governor-elect Jim Justice on how best to bridge the state’s $400 million budget gap in this MetroNews piece.

West Virginians have faced year-after-year cuts to services they rely on. Over the last 10 years, corporations were given more than half a billion in tax breaks while job growth stagnated in the state. Legislators must explore more balanced options moving forward, including revenue-generating measures that invest in our people.


Repealing the Affordable Care Act would have a heavy impact across the nation, but especially in West Virginia Natalie Schreyer writes in this Charleston Gazette-Mail story.

West Virginia has seen one of the biggest drops in the number of uninsured (14 to 16 percent) in the nation since the ACA’s implementation. The Urban Institute estimates 184,000 West Virginias will lose coverage by 2019 under a partial repeal. The state also stands to lose millions in Medicaid funding, including the Children’s Health Insurance Program (CHIP). This Commonwealth report shows an ACA repeal would kill more than 16,000 jobs in West Virginia by 2019.

wvahc-logoWest Virginias for Affordable Health Care is seeking a dynamic leader to be its new Executive Director.

The Executive Director is responsible for fundraising, including grants, event planning, and direct mail appeals. Other duties include research on health care public policy issues, building coalitions and conducting education and public outreach campaigns, and grant management. If you know anyone who is good fit or might be interested in the position, have them send a cover letter, resume, a writing sample, and three references by January 20, 2017 to info@wvahc.org.

Upcoming Events
Join Advocates for a Safe Water System Tuesday, January 17 for a rally and hearing at 5:30 p.m. The PSC is located on the corner of Quarrier and Brooks street in Charleston. The rally starts at 5:30 p.m. with the hearing directly following at 6:00 p.m.

Bring a flashlight – tell the PSC to shine a light on WV American Water!The public has never gotten the full story of why our water system failed on January 9th, 2014 – and what needs to happen to prevent such a disaster from happening again. We deserve to know.

The Public Service Commission has been conducting an investigation into the WV American Water’s response to the Freedom Industries chemical spill. The water company has repeatedly tried to keep the public in the dark by pushing to narrow the investigation and even eliminate it entirely.

What We Are Reading…
“The Rich Already Have a UBI” is a clear, short, and smart piece from Matt Bruenig on how those in the top 1 percent already have a Universal Basic Income from capital income. It points out that “1 in 10 dollars of income produced in this country is paid out to the richest 1 percent without them having to work for it.”

– Over at evonomics Steve Roth discusses how America’s rich get rich and stay rich. One data nugget from the piece is that about “60 percent of U.S. household wealth is inherited” and that at least one in four of the Forbes 400 billionaires got rich from inherited wealth. That’s why the easiest way to make money, is to have money to make money on money, instead of working for a wage like most people.

– In New York, Governor Andrew Cuomo has announced a plan to make public college tuition free for families that earn $125,000 or less annually in New York. This would be a good idea for West Virginia policymakers. Approximately 89 percent of families in West Virginia make below $125,000 annually (ACS 2011-2015).

– Don’t miss this interview with Bryan Stevenson on his project to advance understanding of America’s racial violence through the Equal Justice Initiative on Lynching in America. If you’ve never watched/listened to Bryan’s TedTalk on injustice, it is worth it. Find it here.