West Virginia is heavily dependent upon Medicaid to provide health care coverage.  One out of every four residents (28 percent) relies on the state/federal program to pay for doctor visits, hospitalization, nursing home stays and more.

Figures from the state Department of Health and Human Resources show 347,481 West Virginians are on traditional Medicaid, while another 172,288 are in the expanded Medicaid program created by ObamaCare.

The state’s dependence on Medicaid to cover the cost of health care for so many of its residents means West Virginia leaders must carefully review the U.S. House of Representatives proposed replacement for Obamacare.

For example, currently the federal government pays 95 percent of the medical costs for adults under 65 with income at or below 138 percent of the poverty level who are in the expanded Medicaid program.  That drops to 90 percent by 2020, but no lower.

However, under the American Health Care Act, beginning in 2020 the federal match for new enrollees would be reduced from 90 percent to the regular reimbursement rate for each state, which in West Virginia is 72 percent.  (The reimbursement rate would stay at 90 percent for those in the ObamaCare expansion.)

That raises the question of whether West Virginia would find the additional funding necessary to continue to cover individuals and families up to 138 percent of the poverty level.

Let’s say West Virginia decides to only cover those at or below the poverty level.  Would low income West Virginians just above that be able to afford coverage on the individual market using the proposed tax credits or would they fall back into the ranks of the uninsured?

Another significant provision is the proposed cap on Medicaid payments.  Currently Medicaid operates an open-ended system where the federal government automatically pays reimbursements to the states when enrollment or costs rise, thus there is no incentive to contain costs.

Under the American Health Care Act, the federal government would establish per capita caps.  Providers would be freed from some of the regulatory constraints that now accompany the open-ended method, and that is supposed to lead to greater efficiencies, but there would also be new limits on the amount of money provided to states.

West Virginia could find itself getting less money from Washington to help pay for its Medicaid program.

The Republican plan also includes a $100 billion “stability fund.”  West Virginia would get a share of that money (it’s not clear yet how much) to help smooth the transition. For example, the money could be used to subsidize lower income residents in the private insurance market or help fund a high-risk pool for the sickest.

West Virginia has a poor, unhealthy population. Like it or not, Medicaid expansion under ObamaCare has provided a mechanism for coverage.  House Republican leaders say they have a better plan, and maybe they do.  But for West Virginia, any new plan must be squared against the impact it will have on the substantial Medicaid population, the providers and the state budget.

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