Senate Health Bill (BCRA) Would Hit West Virginia Hardest

While it is unclear what version of the legislation the U.S. Senate will plan to take up on Tuesday (7/25) when they vote to proceed to repeal and replace the Affordable Care Act (ACA), the revised version of the Better Care Reconciliation Act (BCRA) would be particularly harmful to West Virginians.

An updated report from the national Center on Budget and Policy Priorities shows that West Virginia would be among the hardest hit states in the nation. Not only would the number of uninsured West Virginians grow by nearly 300 percent – the largest increase in the nation (See Map) – but it would reduce federal Medicaid/CHIP spending by half or $1.8 billion by 2022. Last-ditch efforts by Senate leadership to offer more money to Medicaid expansion states won’t fix this bill either. Below is a quick summary of BCRA’s impact on West Virginia and here’s a one-page fact sheet.

West Virginia Would Sustain Huge Coverage Losses

  • 211,000 West Virginians would lose coverage by 2022 if BCRA is passed.
  • The BCRA would increase West Virginia’s non-elderly uninsured rate from five percent to over 19 percent, a 299 percent increase, more than any other state.
  • 1 out-of-seven non-elderly West Virginians who would have coverage under the ACA would lose it because of the BCRA.

West Virginia’s Medicaid and CHIP Programs Would Be Cut in Half

  • The BCRA would cut West Virginia’s CHIP program by 47 percent by 2022 (compared to 26 percent nationally)
  • The number of people enrolled in Medicaid would fall by more than half by 2022, or 263,000 people.

 BCRA Would Drastically Increase West Virginia’s Costs to Maintain Medicaid Expansion

  • The state’s cost to maintain expansion would rise by 50 percent by 2021, 100 percent by 2022, and 150 percent by 2023.

 BCRA Would Make Access to Substance Use Disorder Treatment Less Available

  • West Virginia has the highest drug overdose death rate in 2015.
  • The share of West Virginians with substance use or mental health disorders who were hospitalized but uninsured fell from 23 percent in 2013 to five percent in 2014.
  • Rolling back expansion would roll back coverage for the 33 percent of West Virginia expansion enrollees who used mental health or substance use disorder services in 2014.

 

Senate Health Care Bill Cuts Medicaid to Pay for Tax Cuts for the Rich – UPDATED

The Better Care Reconciliation Act (BCRA), the latest Republican plan to repeal and replace the Affordable Care Act (ACA), was introduced in the U.S. Senate on June 22, 2017, and is awaiting a vote. In its current form, the bill would eliminate most of the provisions of the ACA, including its tax provisions, and drastically cut Medicaid, essentially ending Medicaid expansion and instituting per capita caps. The end result of these changes for West Virginia would be a large tax cut for a small number of the wealthiest individuals in the state, while tens of thousands would lose Medicaid coverage.

The two largest tax provisions that would be repealed are the  Additional Medicare Tax, which is a 3.8 percent tax on wages for taxpayers with wages exceeding $200,000 ($250,000 for married earners), and the Net Investment Tax, which is a 3.8 percent tax on investment income for taxpayers with income exceeding $200,000 ($250,000 for married couples). Repealing these two taxes would cost over $31 billion, with 85 percent of the benefit going to the top 1 percent of Americans.

According to the Institute on Taxation and Economic Policy, only 11,100 West Virginians would benefit from the repeal of these two taxes, or only 1.2 percent of taxpayers in the state. The tax cut would be worth $46 million for West Virginia, with 96 percent of the savings going to the wealthiest 1 percent in the state, or those earning more than $346,000/year.

On the health care coverage side, federal funding for Medicaid would be $102.2 billion lower in 2022 under the BCRA than under the ACA, a 26.4 percent decline. Federal funding for premium tax credits and cost-sharing reductions would also fall by $38.2 billion, an 84 percent decrease. West Virginia would lose $1.8 billion in federal spending, a 48.9 percent decrease compared to current law.

The decrease in funding would force West Virginia to end Medicaid expansion, and make further restrictions to Medicaid eligibility. According to the Urban Institute, 264,000 West Virginians would lose their Medicaid coverage due to the loss of federal funding. Overall, 218,000 West Virginians would lose health insurance coverage, quadrupling the state’s uninsured rate.

 

The cost to give 11,100 of the wealthiest West Virginians millions in tax cuts is 218,000 uninsured West Virginians. The “savings” from the cuts to Medicaid are poured directly into tax cuts which overwhelmingly benefit the wealthy. Overall, for every West Virginian who would benefit from the tax cuts in the Senate health care bill, 24 would lose their Medicaid coverage. The core of the BCRA is taking away health care from millions of people in order to pay for a tax cut for the rich.

 

***UPDATE***

New numbers from the Urban Institute provide estimates for the number of children affected by the Senate’s health care bill. In West Virginia, the number of uninsured children would increase by 19,000 by 2022 under the Senate health care bill, a 475% increase. The uninsured rate for children in West Virginia would increase from 1.1% to 6.2%. West Virginia would have the largest increase in the share of its children who are uninsured in the country.

Medicaid Turns 50: How the Program Has Helped West Virginians in the Last Half Century

by Brooke Bailey, 2015 Summer Research Associate

On July 30, 1965 – fifty years ago – President Lyndon Johnson signed a piece of legislation into law that would one day provide assistance to over 70 million people across the United States. Since its adoption, Medicaid has provided health coverage to the states’ most vulnerable populations.

Medicaid directly impacts more than 530,000 West Virginians by providing health coverage to low-income seniors, children, and people with disabilities and by providing parents and other adults economic security through health coverage that protects them from medical debt and allows them to remain healthy and work.

2014 Enrollment Medicaid

Source: Center on Budget and Policy Priorities.

Medicaid is also important to the state’s economy, providing thousands of jobs in the health and long- term care sector and indirectly supporting local businesses where workers spend their money.

In celebration of this influential program that has helped so many West Virginians in need, we should reflect on some of Medicaid’s successes.

West Virginia’s Medicaid Expansion

The Affordable Care Act (ACA) of 2010 gave states the option to expand their Medicaid programs to include individuals between the ages of 19 and 64 who have incomes at or below 138 percent of the Federal Poverty Level.

Governor Tomblin announced West Virginia’s expansion of the program in May 2013. Through the end of fiscal year 2014, over 130,000 individuals received Medicaid coverage as a result of the program’s expansion. While the rate of uninsured non-elderly adults remains relatively high at 20.7 percent, that rate has dropped by 6.7 percent since the 2013 expansion.

Aiding West Virginia’s Children

Medicaid is primarily a health insurance program for low-income children. More than half of all Medicaid beneficiaries are children. Medicaid ensures that children get screening to catch health and developmental problems early. This is especially important for West Virginia because of its high rate of child poverty.

207,900 children in West Virginia receive health care through Medicaid. That means that about one in two, or almost 50 percent, of kids can see a doctor and receive the care that they need for healthy development, like vaccinations and screenings, all because of Medicaid. Along with CHIP, Medicaid has significantly reduced the number of uninsured children in West Virginia. Only 5.3 percent of the children in our state remain without insurance.

Medicaid also has a number of long-term benefits for kids. Children who are eligible for health coverage through the program are more likely to do better in school, miss school less often, are more likely to finish high school, attend college and finish college, have fewer emergency room visits and hospitalizations as adults, and earn more as adults.

Federal Support

Medicaid is jointly funded between the states and the federal government. Each state enjoys flexibility in managing its program in accordance with national guidelines. In exchange, the federal government covers about 57 percent of the costs nationally. That percentage is consistently higher in West Virginia, with a 70 percent federal share in 2014, a decrease from 81 percent in 2010. For every dollar West Virginia spends on Medicaid benefits, the federal government chips in an additional $2.20.

The significant federal funding allows Medicaid to support West Virginians during difficult economic times. It is a counter-cyclical program, meaning it grows to meet the need when the economy is in a downturn and residents face job loss or economic hardship. On several occasions, leaders at the federal level increased federal Medicaid contributions to help states manage enrollment growth even when states experienced declining revenues.

Efficient Health Coverage

Not only does Medicaid provide access to critical health care services, it also does it more efficiently than private insurers do. Ninety-four cents of every dollar spent on Medicaid goes directly to health services, making the program’s administrative costs less than half those of private insurers. Medicaid also spends less per enrollee than private insurers for both children and adults. Medicaid’s costs increased at about one-fourth the rate of private insurance since 2007.

2005 Costs Per Enrollee Medicaid

Source: Center on Budget and Policy Priorities.

Medicaid has earned a well-documented reputation over the years by helping some of West Virginia’s most vulnerable residents access necessary health care services. In the ever-changing health care and economic landscape it offers a stable source of care for people in need while delivering critical financial resources that ripple through the state’s health care system. West Virginia’s leaders can find ways to build upon the past successes of Medicaid in ways that can also help West Virginians who remain uninsured receive better access to health care.

To learn more about West Virginia’s Medicaid program, read our publication Medicaid Made Simple.

To learn more about Medicaid in general, visit CBPP’s website.

Gambling With Children’s Health

The health of of close to 25,000 children in West Virginia is at risk if Congress does not chose to reauthorize the Children’s Health Insurance Program (CHIP). As  Senator Jay Rockefeller mentioned in today’s Charleston Gazette, defunding CHIP could hurt not only children’s health but making it harder for families to make ends meet. CHIP is a highly successful program in West Virginia, granting quality health coverage to thousands of children from working families. 

The added benefits offered in the CHIP program might otherwise be unaffordable for many working families in state. For example, CHIP’s medical benefits include dental care, hearing aids, and additional physical/occupational therapy where marketplace coverage designed for adults does not provide these options for children.

Additionally, CHIP coverage is much more affordable for working families due to the caps on deductibles and out-of-pocket costs. A report  from the National Alliance to Advance Adolescent Health details the potential cost increases if the children in the CHIP program are moved to private marketplace plans, qualified health plans (QHPs).

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chipdeduct
Source: Margaret A. McManus and Harriette B. Fox, “Lack of Comparability Between CHIP and ACA Qualified Health Plans” (Washington, D.C.: The National Alliance To Advance Adolescent Health, July 2014). 

These charts show that the out-of-pocket limits could cost families almost tenfold in a marketplace plan. Also, children in the CHIP program have to pay little to cover their deductibles, where, in marketplace plans, families could end up paying close to $2,500 before their insurance company will begin paying.

We shouldn’t be playing a political game with the health of  children in our state. Children have special health care needs. Ignoring the difference in needs of children and adults will put the healthy development of children at risk.

The marketplaces are not yet ready to provide the type of comprehensive coverage these children need and the costs put children at risk of becoming uninsured altogether.  West Virginians should encourage lawmakers to make sure CHIP funding is renewed and not “wait and see what happens” when the program is gone.

West Virginia Teens: Continuing High Rate of Tobacco Use, Other Unhealthy Behaviors

Last week, the CDC released new data from its biennial Youth Risk Behavior Surveillance System (YRBSS).  The YRBSS surveys thousands of middle and high school aged youth across the country, questioning them about a number of health and behavioral risk factors, everything from diet to alcohol use to sexual activity.  The survey is large enough to give a clear picture of behavior among youth across the country and how it varies by state and region.

The new data provide some interesting insight into the behavior of West Virginia youth and how they compare to their national counterparts. While there are certainly some promising trends in West Virginia, such as the plummeting use of meth (surprising, right?), there are also a number of very worrisome results of which we must be aware.

Tobacco use is overwhelmingly the factor that jumps out the most. While high school age smoking has dropped dramatically in West Virginia and across the country since the early 1990s, West Virginia remains significantly behind the rest of the country in both the rate of declining use and the number of teens who currently smoke.

Source: CDC Youth Risk Behavior Surveillance System, 1993-2013 Results

Source: WVCBP analysis of CDC Youth Risk Behavior Surveillance System, West Virginia 1993-2013 Results

The figure above shows the trends of high school age youth who are current smokers since 2009.  As you can see, nationally this rate has declined from 19.5 percent of high schoolers to 15.7 percent, a drop of nearly 20 percent.  In West Virginia however, the drop has not been nearly so steep and, in fact, has ticked up slightly since the last survey in 2011. At 19.6 percent, West Virginia high schoolers are 25 percent more likely to smoke than their peers across the country.

Another factor where West Virginia’s youth does poorly is in soda consumption. Regular soft drink consumption is known to increase the risk for a number of health conditions such as obesity, diabetes, and dental cavities. West Virginia youth drink much more soda than American youth on the whole. High schoolers here are 40 percent more likely to drink at least one soda per day and 67 percent more likely to drink three or more sodas per day.  The figure below highlights these differences:

Source: WVCBP analysis of CDC Youth Risk Behavior Surveillance System, West Virginia 1993-2013 Results

Source: WVCBP analysis of CDC Youth Risk Behavior Surveillance System, West Virginia 1993-2013 Results

Other factors where West Virginia youth behaviors were significantly worse than the national average include being sexually active, not using a condom during most recent sexual intercourse, wearing a seat belt, and attending physical education classes in school. The table below lists every factor in which West Virginia’s youth reported unhealthier or riskier behaviors than their peers nationally:

Youth Risks 2

Source: CDC Youth Risk Behavior Surveillance System, West Virginia 2013

On most other issues like alcohol use, illicit drug use, and diet, West Virginia’s youth fell around the national median. Of course, regardless if it’s about the same as the national rate, the fact that kids are still participating in many of these behaviors is something to worry about, such as the five percent of West Virginia high schoolers who have used cocaine.

Why does any of this matter?  Because we know that most health behaviors are established early in life and if we don’t get this ship turned around for our youth, then we’re going insane if we expect to have healthier adults. 

Hopping Over The Affordable Care Act

While I appreciated reading a column this week by Hoppy Kercheval about the ACA, I was disappointed to see him recycle the same arguments that have been disproved for months now.

Hoppy’s biggest concern is how we’re going to pay for Medicaid expansion in the future. He points out that the actuarial estimates showed that over 10 years West Virginia will take in $5.2 billion in federal funds while having to spend an additional $375 million in state dollars. What he doesn’t consider is the impact of all that additional money on the state’s overall economy. Many states that debated Medicaid expansion did a study on the economic impact of expansion (unfortunately, Governor Tomblin never requested one) and in most states that did them, it was determined that there would be a net economic gain. Next-door neighbor Kentucky, for example, found that expanding Medicaid would save the state $800 million over the next eight years. This is because the increased federal and state dollars will create permanent jobs, an estimated 16,700 of them in Kentucky alone, which generates significant economic activity and tax revenue that otherwise would not exist. Using Kentucky as a guide for a little napkin math, I previously estimated that West Virginia could see the creation of over 6,500 jobs and a net positive economic impact of over $40 million per year. Put another way, it would cost West Virginia more money not to expand.

Another concern of Hoppy’s is that the federal government will renege on its promise to fund 90 percent of the Medicaid expansion in the years ahead. However, there is no historical precedent in which the federal government has backed out on a legal promise to states to fund programs.  Had something like that ever happened, especially at this scale, it may be a reasonable argument, but otherwise it sounds little different than “I don’t want to take this new, better job because I may get laid off one day.”

Hoppy’s next concern is that “there is no guarantee that providing people with free health insurance…will encourage people to make price-conscious decisions about their care.” This ignores the fact that uninsured people who get sick or injured are forced, by default, to make the least price-conscious decisions possible. If you are uninsured, you will be unlikely to afford preventive care but that doesn’t mean you won’t seek care when your condition gets so bad you really need it. Many of these folks enrolling in Medicaid today have conditions like diabetes which can be effectively controlled at a much lower cost with regular care than being forced to wait until they go into diabetic shock and show up in an ER via ambulance.

There’s a related point to be made here that lack of price transparency, arguably one of the biggest problems in American health care, makes it difficult for anyone to make price-conscious decisions. Very rarely will anyone, whether that’s your doctor or your insurer, be able to tell you in advance how much a particular visit or procedure will cost. Imagine going to a restaurant with no prices on the menu and neither the waiter nor the chef are willing or able tell you how much your dinner will cost until they send you a bill in the mail weeks later. You’d have quite a hard time making price-conscious decisions without that information, but that is the very frustrating reality in which we currently live.

Hoppy’s next concern exemplifies the disingenuous tactic that opponents of the ACA often use which is to point out historical problems with our health care system and suggest they are somehow related to the ACA.  He states that West Virginia has a provider issue. While this is both true and false, most importantly it is nothing new.  First off, when you look at the state as a whole, we actually have a higher rate of primary care physicians than most states while we also have the highest proportion of Federally Qualified Health Centers in the U.S. (Hoppy acknowledges both of these, which contradicts his opening statement).  The bigger point though is that provider access issues are highly localized. This is just as true across the country as it is in West Virginia. For example, Ohio County has a ratio of one primary care doctor per 632 residents, ranking it one of the highest in the entire U.S., while Clay County, with only one primary care physician per 4,679 people, is much lower than the national average. But this issue of provider shortages in rural or underserved areas has been acknowledged for decades. It could be argued that these issues may be exacerbated as more people gain health insurance but it could also increase the number of providers willing to practice in underserved areas as more people in the community can pay for care. And even if it were true that we don’t have enough providers, is the acceptable course of action limiting the number of people who can afford to access those providers?

None of Hoppy’s concerns that he expresses here are anything new, they are all issues that have been addressed and disproven across the country.  Are there consequences to expanding Medicaid? Certainly there are some, but the evidence has shown that they are greatly outweighed by the benefits, both for the economic health of our state and the physical (and financial) health of its residents.

Fate of Health-Related Bills in the 2014 Legislative Session

The 81st West Virginia Legislature wrapped up session last Saturday night with 30 health-related bills (by my count). These bills spanned the spectrum from the hot button issue of abortion that continues to generate media coverage to bills that passed multiple committees and both chambers unanimously with nary a peep of press. Here I will highlight a handful of the more significant bills and their potential impact with a complete list of the bills, linked to the full text, at the end.

A good portion of these 30 bills seem to be largely procedural, simply amending or adding language to existing state code that overall has little statewide impact. An example of this is Senate Bill 314 which changed language in section 7-18-14 of state code from “There is one and only one hospital within the county” to read “There is no more than one hospital within the county.” 

Senate Bill 373 Water resources protection

One of the bills generating the most noise all session was one that would not have even been on the docket if it weren’t for the January 9 chemical spill into the Elk River. The bill requires the Department of Environmental Protection to look at what sorts of pollutant sources exist upstream from water treatment plant intakes and creates an entirely new program to monitor above-ground storage tanks. Additionally, after much debate, the final version of the bill does require the state Bureau for Public Health to study the long-term health effects from the MCHM chemical exposure related to the Freedom Industries spill. (Check out Ken Ward’s Coal Tattoo blog for lots of information on this bill.)

Senate Bill 395 Operation and oversight of certain human services programs

This was one of those bills that really seemed to slip by completely unnoticed. It adds two sections to existing state code, one (9-5-8b) gives authority to the Investigations and Fraud Management Division of the Office of the Inspector General to subpoena witnesses and documents in the investigation of potential cases of benefits fraud. The second section (61-4-9) states that anyone found guilty of possessing public assistance benefits (e.g. SNAP or TANF) that do not legally belong to them may face misdemeanor or felony charges based on the value of the benefits and could face fines and imprisonment. The bill did not come with a fiscal note.

House Bill 3108 Criminal background checks on applicants for employment by nursing homes

Adding a new section to state code, 16-5C-21, HB 3108 states that nursing homes shall conduct criminal background checks on all applicants before permanently employing them in their facility. The bill states that any applicant who has been convicted of a felony within the past 10 years may not be employed by the nursing home, while any applicant who has ever been found guilty of a misdemeanor or felony involving abuse against an elderly person may not be employed.

The state’s population is aging and a growing proportion of its residents are being admitted to nursing homes or other long-term care facilities and it is therefore more important than ever to ensure that we are protecting our seniors. I do find it odd that the bill is worded in such a way that criminal background checks must be completed on all applicants, and not just those applicants who are being offered employment. Also, as there is no fiscal note attached to this bill, I presume that the nursing homes will be responsible for the cost of requesting the checks. 

House Bill 4237 Prohibiting sale and use of electronic cigarettes by minors

I believe it is pretty safe to say that this is a bill that most folks would consider a no-brainer. HB 4237 amends Article 9A in state code to include alternative nicotine products, vapor products, and electronic cigarettes in the definition of tobacco products, specifying that no person under the age of 18 is permitted to be sold or use such products. 

House Bill 4335 Child’s right to nurse

Possibly the most succinct bill passed this session, HB4335 adds a new section, 16-1-19, to state code that explicitly protects a mother’s right to breast-feed a child at “any location open to the public.”  It may come as a surprise to many people that versions of this bill in the past have faced significant resistance, dying in committee. The vote tally this year was an overwhelming 130 Yeas to two Nays (Del. Gearheart in the House and Sen. Barnes in the Senate) with two not voting.

House Bill 4588 Prohibiting abortion after 20 weeks

Unsurprisingly, one of the most controversial bills of the session that resulted in a number of impassioned speeches on the floors of both chambers was HB 4588 regarding abortion. Currently, West Virginia is one of 10 states that does not have a law that limits abortions based on gestational age of the fetus. This means that, in theory, a woman could seek an abortion at any point in her pregnancy.  In practice, however, late-term abortions simply don’t happen very often. According to the most recent data from the CDC, only seven abortions, less than one-half of one percent of the total abortions in West Virginia, occurred after 20 weeks of gestation. As health care providers are required to report all abortions for any reason, it’s possible that some or all of those abortions were due to medical reasons of the mother or fetus. It’s important to point out that HB 4588 does include certain, very narrowly defined exceptions to permit a woman to seek an abortion after 20 weeks gestation.  One exception is if termination is necessary to “avert her death or to avert serious risk of substantial and irreversible physical impairment of a major bodily function.” The other exception is if a physician determines that “there exists a non-medically viable fetus.”  Even with such language, a physician’s fear of being prosecuted may limit a woman’s medical options, as several physicians testified before the Legislature.  Dr. David Jude, an OB-GYN at Marshall University was quoted saying “Frankly, I don’t want to be on call wondering if I’m going to be prosecuted for terminating a pregnancy.”  In addition to these concerns, there is also belief among many that such a state law may be challenged as unconstitutional in federal court. Media reports indicate that Governor Tomblin is considering a veto of the bill due to such constitutionality questions.*

Some bills that didn’t pass are also worth noting. For example, House Bill 4191 and Senate Bill 534 both would have raised the tobacco tax substantially, generating up to $137 million more in state revenue, but both died in committee. Oddly, even though electronic cigarettes and vapor products were redefined as tobacco products by HB 4237,  restricting their usage by minors (discussed above), the failure of the tobacco tax bills means that for tax purposes, electronic cigarettes are still not considered tobacco products.  

Senate Bill 6 to make pseudoephedrine available by prescription only was a controversial bill that received a lot of attention but ultimately failed amid last-minute controversy. While the bill’s intent was to reduce the number of clandestine meth labs (and all the economic and health costs that go with them), pharmaceutical lobbyists won the public-relations battle, convincing many that the prescription-only requirement would not work even though the evidence from Oregon and Mississippi points the other way

Finally, Senate Bill 455, or the Move to Improve Act, would have established physical activity minimums for the state Department of Education to include in its mandatory statewide curriculum. The bill was an effort to address obesity rates among West Virginia children but ended up dying in committee.

Here is a full list of health-related bills that passed the 2014 WV Legislature:

SB12 Expedited partner therapy

SB155 Authorizing DHHR promulgate rules

SB314 Hotel occupancy tax in counties with no more than one hospital

SB341 Supplemental appropriations from excess lottery revenue fund to Division of Human Services (Medicaid)

SB373 Water resources protection

SB394 Health Sciences Service Program

SB395 Operation and oversight of certain human services benefit programs

SB425 Licensure, supervision, and regulation of physician assistants

SB456 Extending expiration date on health care provider tax

SB523 Creation of veterans skilled nursing facility in Beckley

SB602 Requiring health care providers wear ID badges

SB619 Exempting certain critical access hospitals from certificate of need

HB3108 Criminal background checks on applicants for employment by nursing homes

HB4005 Criminal offenses for child abuse and neglect

HB4188 Updating authority and responsibility of the Center for Nursing

HB4208 Banning synthetic hallucinogens

HB4217 Medicaid reports to the legislature

HB4237 Prohibiting sale and use of electronic cigarettes by minors

HB4245 Anticipated retirement dates of certain health care professionals

HB4278 Rewriting procedure by which corporations may obtain authorization from Board of Medicine to practice medicine

HB4284 Pregnant Workers’ Fairness Act

HB4287 Administration of health maintenance tasks

HB4312 Creating certification for emergency medical technician-industrial

HB4318 Continuing education relevant to mental health issues of veterans

HB4332 Extending time certain nonprofit groups are exempt from nursing home bed moratoriums

HB4335 Child’s right to nurse

HB4363 Informal dispute resolution process for behavioral health providers

HB4538 Relating to Board of Dentistry

HB4560 Relating to reimbursement for copies of medical records

HB4588 Prohibiting abortion after 20 weeks

*Note: a reader contacted me to point out that I had referred to an incorrect draft of HB 4588, the Engrossed Version rather than what ultimately passed.  I’ve updated the post to include reference to the language found in the final version of the bill–BM 3-17-14

Raising The Minimum Wage Would Kick Thousands Off Medicaid – Here’s Why That’s A Good Thing

There was an odd argument that came up earlier this week in the Senate Finance committee debating HB4283 to raise the minimum wage in West Virginia – raising workers’ wages would kick West Virginians off of Medicaid. This is odd for a number of reasons: first it suggests support for more dependence on public assistance programs, secondly it implicitly suggests support for lower wages, and thirdly because it came from conservative opponents of the bill.

Yes, it is true that raising the minimum wage to $8.75 in West Virginia would likely end up pushing a lot of West Virginians off of Medicaid, perhaps tens of thousands of those who have just become eligible for the very first time.  As I’ve pointed out before, the majority of those West Virginians qualifying for expanded Medicaid are the working poor, many of whom are going to be making at or near minimum wage.  A cashier working full-time at the current minimum wage of $7.25 an hour earns $15,080 a year, a little under 130% of the official Federal Poverty Level for an individual, qualifying them for Medicaid under the new expansion guidelines. However, that same cashier making $8.75 an hour would earn $18,200 a year, over 150% FPL, which would push them beyond Medicaid eligibility.

There are a lot of reasons that this is a good thing for West Virginia. Primary among them is that it would bring thousands of people off of Medicaid, which is the most expensive program for the state. 

In the past we may have argued that pushing people off of Medicaid would be dangerous because it would likely leave them uninsured, but this is no longer the case.  Today, all of these people will be guaranteed access to affordable health coverage through the insurance marketplace at Healthcare.gov. And I truly mean affordable. For example, the cashier who now earns around $18,000 a year would not have to spend more than 4.3 percent of his income on health insurance. This means that he could find a silver level Highmark Blue Cross Blue Shield plan on the state exchange for $65 per month. Plus, he’d qualify for substantial assistance in out-of-pocket costs like co-pays and deductibles.

There’s also the not-so-small matter that bringing more healthy people on to the exchange in West Virginia would improve its community rating, which could help lower premiums across the board for insurance plans offered in the exchange.

Essentially, raising the minimum wage would get more low-income workers off the government programs and reduce costs to the state in a time of serious budget challenges, all the while helping to push health insurance premiums down statewide.

How Your Tax Dollars Subsidize Cigarette Prices

Once again it looks like another year will go by without an increase in the state tobacco tax. This year it is quite surprising though as West Virginia is facing a severe budget crisis and raising tobacco taxes would essentially fix it all in one fell swoop. Nevertheless, our legislators seem intent on using our emergency savings fund rather than risk their political futures by raising taxes during an election year. Sigh.

What people may be surprised to hear is just how much our taxpayer dollars are subsidizing cigarette prices. Knowing this, perhaps even more people would support raising tobacco taxes, an item that already polls pretty well in West Virginia.

While we are not directly using tax dollars to lower cigarette prices, the simple fact is that smoking causes hundreds of millions of dollars in excess health care costs every year in West Virginia, and a significant portion of those costs are paid for by taxpayer-funded health insurance programs like Medicaid and Medicare and through direct hospital assistance payments.

Tobacco use causes $690 million in direct health expenditures every single year in West Virginia, $229 million of which is spent by the state Medicaid program, according to estimates from the Campaign for Tobacco-Free Kids.  Every pack of cigarettes sold in West Virginia, therefore, results in an additional $8.93 of health care costs. Yet, West Virginia only brought in $107 million in tobacco tax revenue in 2013. This means that West Virginia is spending over $120 million more on tobacco-related health care costs, in Medicaid alone, than the state receives in tobacco taxes! (Figure 1)  Coincidentally, that is pretty close to the amount of increased revenue that the state Budget Office projected would result by passing House Bill 4191 ($134.8 million to be exact). Meanwhile, the Senate version (SB534) would dedicate the entirety of the increase to the Medicaid Trust Fund for the next two years, which happens to be about $35 million more than is needed to close the Medicaid budget gap for FY15 without tapping the Rainy Day funds for $84 million as the governor has proposed.

Figure 1: Annual Medicaid costs from tobacco-related health care exceeds total tobacco tax revenue

Source: Campaign for Tobacco-Free Kids "New revenues, public health benefits, and cost savings from a $1 cigarette tax increase in West Virginia"

Source: Campaign for Tobacco-Free Kids “New revenues, public health benefits, and cost savings from a $1 cigarette tax increase in West Virginia”

To put it another way, a $5 pack of cigarettes actually costs nearly $14 at the end of the day, a hefty chunk paid with your state tax dollars. How many fewer smokers would there be, and therefore millions of dollars less that West Virginia would spend on preventable health care, if cigarettes cost $14 a pack?

So the next time someone in front of you at your local convenience store asks for a pack of Marlboro Reds, be sure to tell them, “You’re welcome.”  

What about declining revenue?

Tobacco taxes are designed to decline over time, but they still generate surprisingly stable revenue.  First, since the whole point of raising tobacco taxes is to reduce the number of people who use it, it is expected that tobacco sales will drop as more people quit and fewer youth start. Secondly, cigarette taxes are calculated on a per-pack basis meaning that the yield per pack will stay the same even as inflation drives overall prices of consumer goods up. The lesson is that states should not depend on tobacco taxes to fund programs over the long-term since revenues will not keep pace with growth, however, they can be successful policy tools to reduce smoking-related costs in the future while providing a stable source of additional revenue in the short-term (Figure 2). Case in point, the increased revenue created by passing either HB4191 or SB534 would be sufficient to bridge the Medicaid budget gap for at least the next three fiscal years, giving the state more time to recover economically or find alternative solutions rather than tapping our emergency savings fund.

Also, it’s worth noting that four of our five neighbors currently have higher tobacco taxes than we do, while Pennsylvania and Maryland still would even after a full dollar increase in our state’s cigarette tax.

Figure 2: State tobacco revenue remains stable even after tax increases

Source: WV State Budget Office. Note: The red stars represent federal tobacco tax increases while the blue and gold star represents West Virginia's last increase from 17 cents to 55 cents per pack.

Source: WV State Budget Office. Note: The red stars represent federal tobacco tax increases while the blue and gold star represents West Virginia’s last increase from 17 cents to 55 cents per pack.

ACA Reducing Uninsured Throughout West Virginia

With just over a month left in the open enrollment period for the Affordable Care Act, the share of West Virginians without health insurance has already dropped significantly. As of this week, nearly 100,000 West Virginians have enrolled in health coverage through the ACA.  The overwhelming majority of these sign-ups have come through Medicaid expansion, which was always expected to be the case. While we can’t say with certainty that none of these folks previously had insurance, it’s a very safe bet that most of them did not.  That means that of the approximately 268,000 West Virginians who did not have health insurance last year, about 34 percent of them are covered today thanks to Medicaid.

medicaid-enrollment-2014

The map above shows the share of those enrolled in Medicaid who are estimated to be income eligible and were previously uninsured by county. Some counties like Clay and Webster have already enrolled over 90 percent of this population, while other counties still have have only enrolled about one-third. For example, the five counties that have signed-up the smallest proportions of their Medicaid eligible populations are all in North Central West Virginia – Monongalia, Doddridge, Harrison, Ritchie, and Marion (Table 1 below).

In addition to Medicaid expansion, there are almost 8,000 people who have enrolled in private health insurance plans through Healthcare.gov, as of February 1st.  Again, we don’t know (yet) how many of them were previously insured but the chances of this group having insurance before are much greater since they have significantly higher average incomes than the new Medicaid enrollees.  Even so, 84 percent of them qualified for tax subsidies to help lower the monthly premium.

While official estimates won’t be available for some time, thanks to the Affordable Care Act (and Governor Tomblin’s decision to expand Medicaid), the number of uninsured West Virginians under 65 may have already dropped from over 18 percent to 12 percent.

Table 1: Percent of Previously Uninsured, Newly Eligible Residents Enrolled in Medicaid, By County

Medicaid Enrollment by County table

Source: WVDHHR, data as of January 24, 2014