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Friday, February 17, 2017

Federal Health Policy - What’s at Stake in Virginia?

The Trump administration has made repeal of the Affordable Care Act (ACA) a priority. This, coupled with expiration of funding for FAMIS (known federally as CHIP) and the likelihood of significant changes to Medicaid, will have substantial bearing on Virginia's health care system and the health of Virginians.

VaOHC staff is staying up-to-date on health policy changes and is steadfast in its mission to increase access to affordable, comprehensive health care that is inclusive of oral health - this includes protecting our recent gains in coverage and access.

FAMIS Funding

FAMIS (Family Access to Medical Insurance Security - known as Child Health Insurance Program, or CHIP federally) provides over 105,000 Virginia children and pregnant women with quality, affordable, comprehensive medical and dental coverage. FAMIS is currently authorized through 2019, however funding expires in September 2017; Congressional action is necessary to ensure the program continues. Historically FAMIS has enjoyed bipartisan support; however, given the current environment, this funding cannot be taken for granted. 

ACA Repeal

In January, Congress approved a budget reconciliation resolution which instructed members to draft budget reconciliation legislation to repeal the ACA. If the ACA is repealed without a replacement, the Urban Institute estimates that over 100,000 children in Virginia will lose medical and dental coverage. When the entire population is considered, this number could grow to over 600,000. In addition, repeal of the individual mandate could lead to much higher premium costs in the individual market, and repeal of taxes and revenues associated with the ACA will make financing a replacement plan difficult. 

ACA Replacement

Congressional Republicans have not coalesced around a replacement package; however, two past proposals (notably from Congressman Tom Price, President Trump's candidate for Secretary of Health, and Speaker of the House Paul Ryan), and recently-proposed Senate legislation provide a framework for what a replacement plan might look like.  Each handles Medicaid differently, and the recent Senate legislation creates an additional mechanism to provide premium relief to consumers. This table provides a side-by-side comparison of the legislation.

Medicaid Changes

Currently, over 600,000 Virginia children and pregnant women have medical and dental coverage through Medicaid and FAMIS. An additional 400,000 low-income Virginia patients, seniors and people with disabilities have a limited dental benefit in addition to medical coverage. As Congress wrestles with what an ACA replacement plan should look like, there is a significant discussion about changing the Medicaid program into a block grant or a per capita cap for states. Under a block grant, states will receive a set amount of funding, based on an established baseline year, for its Medicaid program; no additional funds are available for increased enrollment or other issues. Per capita caps also use a baseline year to determine funding, but states receive set dollar amounts per person enrolled, often with a ceiling of allowable funds. While both scenarios portend to provide states with more flexibility, they are designed to save the federal government money, not to improve health. The amount of money state Medicaid programs receive will be reduced, leaving the states to determine how to administer the program with less money. 

If these changes are enacted, what might this mean for Virginia? Virginia policymakers may have to wrestle with extremely difficult choices because our program is already much less generous than that of other states. In such a drastic scenario, there are only a few levers to pull to cut costs, including: 

  • Reduce reimbursement rates to providers. 
  • Reduce the level/type of services covered. 
  • Reduce eligibility requirements so that fewer individuals are covered. 

Of note, Virginia legislators on both sides of the aisle have indicated they have reservations about changing Medicaid to a block grant program.

Virginia Activity

Currently, the Virginia legislature is considering legislation to create several bipartisan committees to draft policy recommendations related to proposed federal health care changes and to promote efficient and effective health care delivery and coverage in Virginia.

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Sarah Holland

Sarah HollandSarah Holland

Sarah Holland is the Coalition's executive director. Other posts by Sarah Holland

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