Veterans' Health Insurance Coverage Under the Affordable Care Act and Implications of Repeal for the Department of Veterans Affairs

by Michael Dworsky, Carrie M. Farmer, Mimi Shen

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Research Questions

  1. What effects has the Affordable Care Act (ACA) had on nonelderly veterans' insurance coverage and demand for U.S. Department of Veterans Affairs (VA) health care?
  2. How did the ACA Medicaid expansion affect insurance coverage for veterans likely to face geographic barriers in accessing VA care?
  3. Which states' veterans experienced the largest coverage changes after the ACA?
  4. If the ACA were repealed, how might veterans' coverage and VA utilization change?
  5. Which states would experience the greatest increases in demand for VA care if the ACA were repealed?

This report 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.

Key Findings

Insurance Coverage for Nonelderly Veterans Increased After the ACA

  • Insurance coverage gains among nonelderly veterans resulted from Medicaid enrollment due to Medicaid expansion and from increased private coverage, including direct-purchase coverage obtained through the ACA Marketplace.
  • Medicaid expansion led to larger coverage increases for low-income veterans living far from VA facilities, suggesting that Medicaid expansion may be particularly helpful to veterans facing barriers to accessing VA.
  • The largest reductions in the proportion of veterans without insurance were observed in Medicaid expansion states, particularly Oregon, Arkansas, Nevada, Kentucky, and Washington.

Repealing the ACA Would Increase the Number of Uninsured Nonelderly Veterans and Slightly Increase Demand for VA Health Care

  • Without the ACA, 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.
  • The American Health Care Act (AHCA) would increase uninsurance among veterans and demand for VA care by a greater margin than simply returning to pre-ACA levels of coverage.
  • Reductions in coverage under the AHCA would be concentrated among older, lower-income, and less-healthy nonelderly veterans. These populations of veterans tend to use the most health care from VA, magnifying the increase in VA demand resulting from ACA repeal.
  • Other reforms that lead to similar patterns of coverage changes across groups of veterans would likely have a similar impact on VA demand.
  • Under the AHCA, Medicaid expansion states with higher proportions of low-income and nonelderly veterans would experience the largest VA demand increases; Arkansas, Kentucky, and Louisiana would experience the largest increases in VA demand relative to total VA use.

Recommendations

  • 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.
  • The composition of veteran populations affected by health care reform has the potential to shape the impact of ACA repeal on VA demand, since VA eligibility and use vary widely across subgroups of veterans; policymakers need to consider which veterans are likely to be affected by health care reform in order to realistically assess impacts of insurance coverage losses on the VA.

Table of Contents

  • Chapter One

    Background

  • Chapter Two

    Methods

  • Chapter Three

    After the ACA, Fewer Nonelderly Veterans Were Uninsured, and More Reported Medicaid, Private, and VA Coverage

  • Chapter Four

    How Would ACA Repeal Proposals Affect Veterans' Insurance Coverage and Use of VA Health Care?

  • Chapter Five

    Discussion and Conclusions

Research conducted by

The research described in this report was sponsored by the Robert Wood Johnson Foundation and the New York State Health Foundation and conduced by RAND Health.

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