Military Veterans, Obamacare and Repeal

 

Republican/Trump efforts to repeal and replace Obamacare appear to have stalled for now. But how would military veterans be affected by if those efforts succeed? To understand that, we must first understand how veterans were affected by Obamacare in the first place.

 

ObamaCare and Vets

 

The “Obamacare” or private insurance and Medicaid features of the Patient Protection and Affordable Care Act (“PPACA”) had little direct effect on veterans’ health coverage. In fact, Veterans Administration (“VA”) Health Plans meet the PPACA’s individual mandate requirement. And PPACA did not change benefits available under VA Health Plans, or the out of pocket (copayment, coinsurance) costs. (See more information here: https://turbotax.intuit.com/tax-tools/tax-tips/Health-Care/What-the-Affordable-Care-Act-Means-for-Vets/INF26073.html.)

 

But the VA system is not accessible everywhere. Longer wait times at some VA facilities remain a problem. Also, as reported by the Washington Post, “Veterans are not automatically eligible for Veterans Health Administration benefits. Instead, enrollment depends on meeting certain requirements, for instance, serving 24 continuous months. Priority and access to doctors depends further on other characteristics like service-related disabilities and income.”  

 

As a result, veterans benefited just as others did from PPACA provisions expanding Medicaid, providing subsidies for individual coverage and mandating employer coverage. According to an Urban Institute study summarized by CNN, “The uninsured rate among veterans under age 65 dropped to 5.9% in 2015, down from 9.6% two years earlier…. The number of vets lacking coverage fell to 552,000, down from 980,000. The changes started in 2014, when … Medicaid expansion took effect and the Obamacare exchanges opened. Most uninsured veterans had incomes that would make them eligible either for Obamacare subsidies or Medicaid.”

 

Many veterans have also benefited because Obamacare does not allow insurance plans to deny coverage for people with pre-existing conditions, or deny coverage for the pre-existing condition itself, or charge higher premiums for such a pre-existing condition. So a veteran with a combat related injury need no longer fear that the insurance company would deny coverage, putting him/her back into a potentially long wait at a VA facility, assuming one was available.

 

Finally, the PPACA required insurance companies to cover mental health services. Per a Rand Corporation study, “about one-third of returning Service members report symptoms of a mental health or cognitive condition,” so this PPACA mandate has surely benefited many veterans.

 

Impact of the Republican Bills on Veterans’ Care

 

In May, the House of Representatives by a narrow margin approved the “American Health Care Act,” which would repeal and replace certain Obamacare provisions of the PPACA. A couple of weeks ago, Republicans in the Senate rolled out their own ObamaCare repeal and replace effort, the “Better Care Reconciliation Act,” a newer version of which was introduced last week and which apparently collapsed earlier this week. But repeal efforts are continuing, so some version of either or both bills may be revived. While while neither directly addresses health coverage for Veterans, both would have an effect.

 

I’ve addressed the House bill and its impact on preexisting conditions in earlier blogs. But for purposes of this blog, here are some key points: 

 

  • It would replace Obamacare premium subsidies based on income with tax credits based on age. Generally, older, pre-Medicare eligible folks (including older Veterans) who have health insurance would get higher tax credits, regardless of income. Having VA health coverage should qualify a veteran for the tax credit.

  • But insurers could charge premiums for older people at higher rates than for younger people. Under the PPACA, insurers may only charge older people fees up to 3 times as high as those charged for the youngest, but the House bill would allow a 5 to 1 ratio, and states could request waivers to let insurers charge even more.

  • States could also allow health plans to set “premiums based on enrollees’ medical backgrounds,” meaning pre-existing conditions, and to exclude some people entirely based on pre-existing conditions. This could include combat or other service related conditions.

  • To help offset the preceding risk, the House bill requires such states to establish financial assistance funds to help high-risk individuals pay for coverage, which would be supported by federal dollars in undetermined amounts. How this would be accessed and in what amounts remains unclear.

  • States may also permit plans to stop covering mental health services, which, as per above, is often a need for veterans. According to one report, the bill could “strip 7 million veterans of tax credits and place many of them in high-risk pools by classifying post-traumatic stress disorder as a pre-existing condition.”

  • The House bill would roll back Medicaid expansion beginning in 2020.

 

The Senate bill differs from the above House bill in some important points:

 

  • Tax credits would, like the original PPACA, be based on income rather than age. But this subsidy would be less generous than that in the PPACA, cutting off at a lower income level (350% of federal poverty level vs 400% under PPACA).

  • Unlike the House bill, the Senate version would not expressly allow health plans to base premiums on medical backgrounds. But states may authorize insurance companies to sell high-deductible plans that would not cover all care, possibly including for pre-existing conditions. (The Atlantic magazine analyzes this point in some detail.) This means pre-existing (including military service related) conditions might not be covered by plans in some states, and may drive up prices for those plans that do.

  • The Senate bill rolls back Medicaid expansion between 2021 and 2023, imposes further reductions beginning in 2025, and ends expansion right away in 8 states (Ark, Ill, Ind, Mich, Mont, NH, NM, Wash) if federal matching declines below ACA rates. This is likely to impact veterans who receive benefits under Medicaid even more significantly than the House bill.

 

For a more detailed comparison of key provisions of the PPACA and House and Senate bills, see NPR Health Shots

 

If the PPACA is repealed, then those veterans who lose commercial or Medicaid coverage, or coverage for their particular conditions, may have to turn back to the VA system, which, while certainly a viable option, remains overburdened. NPR reports that “a health policy researcher at the Rand Corp. says 3 million vets who are enrolled in the VA usually get their health care elsewhere — from their employer, or maybe from Obamacare exchange. If those options go away… ‘I would expect that the number of veterans using VA health care will increase, which will only provide a further challenge for VA to provide timely and accessible care’.”  

 

Such concerns may explain why at least some Veterans groups are opposed to the PPACA repeal bills, although opposition is certainly not monolithic. 

 

Note: the Senate may vote on a simple "repeal" bill as soon as next week. This would obviously remove the coverage and subsidy described above, but provide no credit or subsidy to help cover premium costs.

 

 

 

 

 

 

 

 

 

 

 

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