This article describes the Affordable Care Act's effects on nonelderly veterans' insurance coverage and demand for Department of Veterans Affairs (VA) health care and assesses the coverage and VA utilization changes that could result from repeal.
Keywords: Affordable Care Act, Health Care Access, Health Insurance, Medicaid, United States, Veteran Health Care
This article describes the Affordable Care Act's (ACA's) effects on nonelderly veterans' insurance coverage and demand for Department of Veterans Affairs (VA) health care and assesses the coverage and VA utilization changes that could result from repealing the ACA. Although prior research has shown that the number of uninsured veterans fell after the ACA took effect, the implications of ACA repeal for veterans and, especially, for VA have received less attention. Besides providing a new coverage option to veterans who are not enrolled in VA, the ACA also had the potential to affect health care use among VA patients.
Findings include the following: In 2013, prior to the major coverage expansions under the ACA, nearly one in ten nonelderly veterans were uninsured, lacking access to both VA coverage and non-VA health insurance. Uninsurance among nonelderly veterans fell by an adjusted 36 percent (3.3 percentage points) after implementation of the ACA, from 9.1 percent in 2013 to 5.8 percent in 2015. By increasing non-VA health insurance coverage for VA patients, the ACA likely reduced demand for VA care; the authors estimate that, if the gains in insurance coverage that occurred between 2013 and 2015 had not occurred, nonelderly veterans would have used about 1 percent more VA health care in 2015: 125,000 more office visits, 1,500 more inpatient surgeries, and 375,000 more prescriptions. Recent congressional proposals to repeal and replace the ACA would increase the number of uninsured nonelderly veterans and further increase demand for VA health care.
The Affordable Care Act (ACA) considerably changed the U.S. health insurance landscape. Among other provisions, the ACA required all adults to obtain health insurance and facilitated this by allowing states to expand Medicaid eligibility to low-income adults, requiring large employers to offer health insurance as a benefit, creating a regulated Marketplace for nongroup health insurance, and providing premium subsidies to help low- and moderate-income adults afford Marketplace coverage. The ACA has led to historic reductions in the proportion of adults without health insurance, but the law has been controversial, and Republican members of Congress have opposed the law since its passage. After the 2016 presidential election, President Donald Trump and Congress affirmed that repeal of the ACA would be a top legislative priority, and the U.S. House of Representatives passed the American Health Care Act (AHCA) on May 4, 2017. The Better Care Reconciliation Act, an amended version of the AHCA, failed to pass the Senate in July 2017, and the path forward for ACA repeal is currently uncertain: President Trump and some congressional Republicans have continued to express strong interest in repealing and replacing the ACA, while other congressional Republicans have voiced interest in improving the law on a bipartisan basis. Debate over the future of the ACA and federal health care reform thus appears likely to continue.
Repealing the ACA could have a significant effect on U.S. military veterans' health insurance coverage and use of health care from the U.S. Department of Veterans Affairs (VA). Veterans are less likely to be uninsured than demographically similar nonveterans, in large part because many have access to VA health care. However, only about one-half of nonelderly veterans (under age 65) are eligible for VA care, and not all who are eligible choose to enroll: Almost one in ten nonelderly veterans lacked any insurance or VA coverage in 2013. Insurance coverage obtained as a result of the ACA had the potential to increase access to care for veterans who are ineligible for or not enrolled in VA.
Besides providing a new coverage option to veterans who are not enrolled in VA, the ACA also had the potential to affect health care use among VA patients. Most VA patients consume a mix of health care from VA and non-VA sources. By making non-VA insurance more widely available to VA enrollees, the ACA may have led some veterans to substitute non-VA care for VA care, perhaps reducing demands on the VA system. Repealing the ACA or introducing additional health system reforms could change both veterans' rates of insurance coverage and, for those veterans using VA care, their patterns of VA health care use.
This study had two goals: to describe the ACA's effects on nonelderly veterans' insurance coverage and demand for VA health care and to assess the coverage and VA utilization changes that could result from repealing the ACA. We used nationally representative data from the American Community Survey (ACS) to estimate changes following implementation of the ACA in veterans' insurance status and VA coverage and data from the Medical Expenditure Panel Survey to model how use of VA health care is affected by changes in non-VA insurance coverage. For our analyses of the potential impact of repeal, we used our estimates of post-ACA coverage changes to quantify how demand for VA care would have differed if the coverage changes that followed the ACA had been reversed. We also drew on microsimulation results from RAND's Comprehensive Assessment of Reform Efforts (COMPARE) model to develop scenarios based on the coverage changes that would result from the AHCA in two future years: 2020 and 2026. For all analyses, we produced both nationwide estimates and state-level estimates for states with large populations of nonelderly veterans.
In our analysis of the 2013–2015 ACS, we used statistical models to adjust for the changing demographics of the nonelderly veteran population. Figures reported in this summary are adjusted estimates for the 2015 nonelderly veteran population unless otherwise noted.
In 2013, prior to the major coverage expansions under the ACA, nearly one in ten nonelderly veterans (9.1 percent) were uninsured, lacking access to both VA coverage and non-VA health insurance.
Uninsurance among nonelderly veterans fell by 36 percent (3.3 percentage points) after implementation of the ACA, from 9.1 percent in 2013 to 5.8 percent in 2015.
The drop in uninsurance among nonelderly veterans can be attributed to increased Medicaid enrollment due to Medicaid expansion and increased private coverage, including direct-purchase coverage obtained through the ACA Marketplace.
Nationwide enrollment in Medicaid increased by 2.6 percentage points for nonelderly veterans. Veterans who became newly eligible due to Medicaid expansion experienced the largest increases in Medicaid coverage and the largest reductions in uninsurance. However, Medicaid coverage rose and uninsurance fell for previously Medicaid-eligible veterans in both expansion and nonexpansion states.
Among low-income nonelderly veterans, Medicaid expansion increased enrollment in Medicaid by 8.4 percentage points relative to similar veterans in nonexpansion states.
Medicaid expansion led to larger coverage increases for low-income veterans living far from VA facilities, suggesting that Medicaid expansion may have provided a valuable new coverage option for veterans facing barriers to accessing VA.
The largest reductions in the proportion of veterans without insurance were concentrated in Medicaid expansion states, particularly Oregon, Arkansas, Nevada, Kentucky, and Washington.
VA coverage among nonelderly veterans increased by 1.3 percentage points after the ACA, but this continued a long-standing trend of increased VA enrollment that preceded the ACA. It is unclear what effect the ACA had on VA enrollment over and above other factors.
We examined the relationship between having non-VA health insurance and both total and VA health care use. VA patients with non-VA health insurance have lower VA demand for office-based visits and prescription drugs, after accounting for differences in demographics, income, and health status between veterans with and without non-VA insurance. To understand how gains in insurance coverage following ACA implementation likely affected VA patients' use of VA health care, we combined those estimates with findings from the research literature and modeled how use of VA health care in 2015 would have changed if veterans' insurance coverage had resembled the lower levels observed in 2013.
After the ACA, fewer nonelderly veterans were enrolled in VA without another source of coverage. VA-Medicaid dual enrollment increased by 2.7 percentage points between 2013 and 2015. Increases in dual VA-Medicaid coverage were especially pronounced for disabled and low-income VA enrollees.
By increasing non-VA health insurance coverage for VA patients, the ACA likely led to a decrease in demand for VA care. We estimate that, if the gains in insurance coverage that occurred between 2013 and 2015 had not occurred, nonelderly veterans would have used about 1 percent more VA health care in 2015: 125,000 more office visits, 1,500 more inpatient surgeries, and 375,000 more prescriptions.
Our estimates of changes in VA health care use do not account for concurrent VA policy changes, which may have had an independent effect on nonelderly veterans' use of VA health care.
We then assessed how changes in coverage similar to those forecast under the AHCA could affect veterans' use of VA and total health care by modeling the effects that such coverage changes would have had on demand for care in 2015. We also used population estimates from VA and information on state Medicaid expansion status to produce state-specific estimates of the AHCA's potential impact on VA demand in all 50 states and the District of Columbia.
Simply reversing the coverage gains that occurred after ACA implementation would increase the proportion of nonelderly veterans without insurance from 5.8 percent to 9.1 percent, a 3.3-percentage-point increase.
Efforts to repeal and replace the ACA with health reforms that substantially reduce the federal government's role in financing Medicaid could potentially result in lower rates of insurance coverage for low-income veterans otherwise unaffected by the ACA's coverage expansions.
If the United States were to adopt health care reforms similar to those proposed in the AHCA, a greater proportion of nonelderly veterans would lose insurance than gained coverage after the ACA took effect:
If the 2020 AHCA provisions had been in place in 2015, 9.6 percent of nonelderly veterans would have been uninsured. Increased insurance coverage for younger, healthier, higher-income nonelderly veterans would have been offset by decreases in insurance coverage for other groups of nonelderly veterans.
If the 2026 AHCA provisions had been in place in 2015, 10.4 percent of nonelderly veterans would have been uninsured. Insurance coverage would have been lower for all groups of nonelderly veterans.
Losses in insurance coverage resulting from the AHCA would lead nonelderly veterans to cut back on overall use of health care while increasing their use of VA care.
VA patients would have received less health care overall (1.7 percent fewer office-based visits and 1.7 percent fewer prescriptions) but more VA health care (2.3 percent more VA office-based visits and 3.2 percent more VA prescriptions) under the 2026 provisions of the AHCA.
Increased VA use by nonelderly veterans would have translated into an estimated annual increase of 245,000 VA visits and 910,000 VA prescriptions, or 1 percent and 1.4 percent of total VA use in 2015.
Medicaid expansion states with higher proportions of low-income and nonelderly veterans would have experienced the largest increases in VA demand as a result of the AHCA, with Arkansas, Kentucky, and Louisiana experiencing the largest increases in VA demand relative to total VA use. Conversely, increases in VA use would be smallest for nonexpansion states with older veteran populations, such as Nebraska, Wisconsin, and Wyoming.
We caution readers that our analyses of the impact of repeal should not be considered forecasts of future VA demand. The nonelderly veteran population is decreasing in size and changing in composition, which will affect demand for VA care in the future. We also do not account for concurrent policy changes that will affect VA demand, such as those aimed at increasing access to care. Instead, our estimates represent the impact that coverage changes similar to those predicted under the AHCA would have had on health care use by the 2015 veteran population.
Our analysis found that the AHCA's effect on veterans' use of VA care would be larger than the effect of simply undoing the coverage gains that occurred after the ACA went into effect. This is because the insurance market changes and reductions in Medicaid spending proposed under the AHCA would primarily affect older, lower-income, and less-healthy nonelderly veterans. These are the same populations of veterans who tend to use the most health care from VA, meaning that the distribution of coverage changes across population groups under the AHCA would tend to magnify the potential increase in VA use that would result from the AHCA's implementation. Legislative proposals that lead to similar patterns of coverage changes across groups of veterans would likely have a similar impact on VA demand.
Some potentially important provisions of the AHCA were not incorporated into the microsimulation estimates we used to analyze ACA repeal. The AHCA and similar legislation would also weaken key consumer protections established under the ACA, such as restrictions that prevent medical underwriting (the practice of using information about a customer's health status in deciding whether to sell insurance and what premium to charge). Such changes may affect the insurability of the estimated 34 percent of nonelderly veterans with preexisting health conditions—and may affect the insurability of a substantially higher share of veterans eligible for VA health care.
At the time this study was finalized (August 2017), an amended version of the AHCA had failed to pass the Senate. The short-term future of efforts to roll back the ACA's coverage expansions thus remains unclear. Even so, the findings of our analysis provide valuable information on the interaction between veterans' access to non-VA health insurance and their use of VA care. While enactment of the AHCA might currently appear unlikely, policy changes included in the AHCA could well reemerge in future legislation. The estimates reported here will thus provide a useful starting point for understanding how veterans would fare under future proposals involving similar changes to the individual market or major reductions in federal Medicaid contributions.
Policymakers considering reforms that would reduce veterans' access to non-VA insurance coverage should be careful to account for potential spillover effects on VA demand. In the event that a law similar to the AHCA is enacted, our findings that older, low-income, and less-healthy veterans would experience the largest changes in coverage may be of interest to federal and state policymakers and VA, as well as community groups concerned with ensuring that veterans have continued access to health care and adequate financial protection from the risk of catastrophic medical expenses.
The research described in this article was sponsored by the Robert Wood Johnson Foundation and the New York State Health Foundation and conduced by RAND Health.