The financial case for states to expand Medicaid, as provided through the 2010 Affordable Care Act, has been well established.
Over the next five years, Virginians will pay $10 billion in new federal taxes associated with implementation of the health care and insurance industry overhaul. The federal government has offered to send nearly all of that money back to the commonwealth if state leaders expand the eligibility criteria for lower-income people to receive health insurance coverage through Medicaid.
If the state doesn’t expand Medicaid eligibility, Virginia’s taxpayers will see their money go to other states, where it will be used to create jobs and improve the health of poorer residents. Twenty-five states have agreed to expand the program.
From a fiscal sense, rejecting the return of Virginia tax dollars to Virginia makes no sense. Based on Tuesday’s election results, more Virginians appear to recognize as much, given that they elected as their next governor Terry McAuliffe, a Democrat who campaigned on a pledge to expand Medicaid.
The financial cost of refusing to expand Medicaid is overshadowed by the human toll. As The Pilot’s Amy Jeter recently reported, Virginia’s intransigence ensures that about 47,000 people here in South Hampton Roads will continue to be denied coverage.
They earn less than 138 percent of the federal poverty level – about $15,415 for one person, and $31,809 for a family of four – making them ineligible to receive the subsidies better-paid people can receive to buy insurance.
Virginia has long held an embarrassing place among the stingiest states for Medicaid spending. It ranks No. 46, according to a study published earlier this year by the state Joint Legislative Audit and Review Commission.
Virginia’s current eligibility criteria restricts Medicaid only to pregnant women, children, the elderly and disabled and families living in abject poverty. A family of four with an annual household income greater than $7,146 earns too much to qualify. Moreover, Census data show 70 percent of Virginia’s uninsured live in households where at least one adult works.
Opponents of expanding Medicaid have alternated between claims that the federal government will never live up to its pledge to cover the statutorily designated minimum of 90 percent of costs in 2021, and that Virginia’s Medicaid costs are already too high.
Neither claim is based in reality. Virginia, for example, relies on the federal government to abide by federal law on all kinds of matters related to spending, including transportation and education. Gov. Bob McDonnell and other elected officials aren’t rejecting federal funds for those initiatives because of a sudden anxiety over the national debt. Medicaid should be no different.
Meanwhile, opponents have managed to conflate two separate programs within the umbrella of Medicaid to stir anxiety over the state’s costs. Critical care coverage is provided to the disabled and elderly, who account for one-third of the people covered by Medicaid in Virginia, but two-thirds of the spending. Lawmakers have shown little stomach for reining in those costs.
The remaining two-thirds of Virginians on Medicaid live in extreme poverty, or are low-income pregnant women and children. Their managed health care represents about one-third of Virginia’s spending on Medicaid. This is the portion of Medicaid that the ACA seeks to expand and fully fund for the next three years through federal tax dollars that Virginians already will pay.
It is also the most efficient form of Medicaid, and expansion is expected to provide coverage to close to 250,000 uninsured Virginians, the majority of them working folks.Their plight, like the obvious math that would relieve it, remains ignored by the current governor and his political allies in Richmond.