You have to read the footnotes: The state estimates that should Virginia approve an expansion of Medicaid to an additional 300,000 low income persons, about 60,000 people now covered by individual ACA plans will revert to Medicaid.
That snippet is buried in a presentation made yesterday to the Senate Finance Committee by its staff, which is a great introduction for the non-experts among us. Whether and how to expand Medicaid is, of course, the main sticking point which has prevented adoption of a state budget.
And by agreeing to a new hospital tax to provide the state’s share of the cost of expansion, the House of Delegates was able to authorize more spending than the Senate in several other key areas of the budget – all politically popular with somebody, creating a minefield of sticking points.
The hospital tax actually will reduce by 40 percent the financial benefit of Medicaid expansion to many of the hospitals serving that population, and the staff report notes that some hospital leaders are pushing a higher tax in order to increase their fees for Medicaid services to 88 percent of their costs.
The staff’s short list of advantages and disadvantages to the hospital tax fails to even raise the possibility that one way or another ultimate costs to consumers will rise further. This is a new tax, a tax on a service. It will be imposed on private hospital revenue from all sources – private pay, Medicare, ACA plans, major insurance carriers or the myriad other choices consumers use. The tax is not imposed on other providers who will treat these newly-covered patients.
The staff also went through a list of conditions and variations to the traditional Medicaid coverage that Virginia might consider to control costs. The House of Delegates has opted for a work or job training requirement. One other option is creating health savings accounts. Right, somebody working in a fast food restaurant has the cash flow to fund an HSA. Please.
As you will note on slide 15, the Senate has voted to expand Medicaid as well, but with a very limited new caseload. Majorities in both chambers are on record supporting benefits to people at 138 percent of the federal poverty level, up from 100 percent.
The expectation is that the Senate Finance committee will hash all this out this week and have something to present to the full Senate by May 22. It is possible unofficial discussions on the final compromise are already going on between some of the leaders in both chambers, but no official conference committee can be named until the Senate actually acts on a full budget.
