Proposed ACA Replacement Approach 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.