Critics: Virginia Medicaid Expansion ‘A Mess,’ Will Lead To Runaway Costs

Watchdog.org | Contributor

By Michael Carroll | Watchdog.org

Virginia Gov. Ralph Northam signed bipartisan legislation last week that will expand health insurance under the Affordable Care Act to an estimated 400,000 Virginians, despite warnings by free-market advocates that the plan will lead to runaway spending.

The Virginia General Assembly for years resisted expanding health coverage in the state under Obamacare, but that opposition eroded in the wake of last fall’s elections, when the House of Delegates saw its Republican majority cut down to a single seat.

Democratic lawmakers and some pro-expansion Republicans teamed up to pass the budget bill that will make Virginia the latest state to move ahead with Medicaid expansion. The plan comes with two provisions designed to appeal to conservatives: a call for Virginia to seek a federal waiver allowing the state to impose work requirements on benefit recipients and a “safety switch” designed to help the state control costs.

That latter would allow Virginia to pull out of expansion if federal funding dipped below 90 percent.

“There’s nowhere in this budget that helps the average Virginian on their health care,” Craig DiSesa, president of The Middle Resolution, a political action committee based in Mechanicsville, told Watchdog.org.

Middle Resolution has opposed Medicaid expansion since Obamacare was passed, according to DiSesa, with program costs being the primary concern. He pointed to research by the Florida-based Foundation for Government Accountability indicating that enrollments in some states ballooned to as much as 300 percent above projections.

The language in the budget bill signed by the governor won’t guarantee that the state will get work requirements or a safety switch through its application to the federal Centers for Medicare and Medicaid Services, according to DiSesa.

“It’s a work suggestion, not a work requirement …” he said. “We won’t have waivers in place, and we will have no control over the growth of the program.”

Another component of the Virginia Medicaid expansion plan is a tax on private hospitals to cover state costs. The idea is that the hospitals, in turn, would also see reduced indigent care costs as more people gained health care coverage.

But DiSesa predicts the hospital tax will simply be passed along to consumers, increasing health care costs overall.

“The budget that finally passed was a cluster,” he said. “It’s just a mess. None of these provisions has any kind of weight.”

In the wake of the fall elections, some Republicans began to see Medicaid expansion as inevitable, so they tried to control it with language about work requirements and a safety switch, DiSesa said.

“They got rolled big time,” he said.

Supporters of expansion, however, say it will provide needed help in economically depressed rural areas.

“It will help struggling communities, including rural hospitals, serve populations that have faced economic burdens in recent years,” Frederick Isasi, executive director of Families USA, said in a prepared statement.

But Isasi also criticized Virginia lawmakers for trying to impose work requirements on recipients, saying the requirements would put up barriers for tens of thousands of needy families in Virginia.

In his statement explaining why he signed the budget bill, Northam said the state would be able to fund the health care coverage without siphoning money away from other state programs.

“The budget will empower nearly 400,000 Virginians with access to health insurance by expanding Medicaid, without crowding out other general fund spending priorities,” he said.

Mike Thompson, president and chairman of the Thomas Jefferson Institute for Public Policy in Springfield, said Republicans in the House of Delegates who backed expansion misinterpreted the message of the fall 2017 elections.

“The drubbing that the Republican state delegates took last fall … was not because of their opposition to Medicaid expansion,” Thompson told Watchdog.org in an email. “The election results were solely because of early-on and overwhelming opposition to President Trump from less-hard-core Democrats and suburban women who came out in much larger numbers than normal in our off-year election.”

The bill could provide Virginia with some of the toughest work requirements in the nation, and it could lead to the state putting in place a process to remove unqualified recipients from Medicaid, he said. But the strength of any work requirements will rest with the Northam administration, according to Thompson.

“That depends, as I understand it, on the Democrat governor asking for the proper waivers from the Trump administration,” he said.

Because Medicaid expansion in Virginia was done through a two-year budget, the issue will come up again in 2020, Thompson said. So lawmakers will revisit the issue and reconsider the future of the program is it is facing financial difficulties, he said.

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