by James A. Bacon
It looks like Virginia will get its first serious debate about Medicaid in decades. In its recent ruling on Obamacare, the Supreme Court made it optional for the states to participate in the law’s massive Medicaid expansion. After an initial phase-in period covered by the federal government, in which coverage will be extended to individuals 38% above the poverty line, states would be responsible for paying 10% of the cost.
The center-left Commonwealth Institute has weighed in with a pro-expansion paper, “Making the Right Choice on Medicaid,” arguing that the program “would be a lifesaver for hundreds of thousands of Virginians, a real bargain for the Commonwealth, and a much needed boost to our economy.” The paper articulates the main line of argument that the pro-Obamacare forces will likely reprise as the debate intensifies.
- Despite its relatively high income, Virginia already has the fourth “stingiest” Medicaid program in the country.
- Expanding the program will bring an influx of billions of federal dollars into the state.
- Without an expansion 400,000 working Virginians and their family members will be stranded between Medicaid and an Obamacare-mandated state insurance exchange with little hope of finding coverage.
- Virginia will spend an estimated $48 billion on Medicaid over the next 10 years. Expanding coverage would add only $2.2 billion more.
There’s more, but you get the idea. Foes object that Virginia can ill afford even $2.2 billion over the next 1o years. They also argue that Medicaid is broken. Provider payments are so low that 28% of doctors say they do not accept new Medicaid patients. “Instead of vastly expanding the rolls and subjecting residents to this failed insurance plan, policymakers should force Washington to pass real reforms to Medicaid,” write Audrey Jackson and Nicole Kaeding with the Virginia branch of Americans for Prosperity in the Times-Dispatch.
My concern is even more fundamental. Obamacare is erecting a fiscally unsustainable model of health care. Facing trillion-dollar deficits as far as the eye can see, the United States is hurtling toward Boomergeddon, a catastrophe that will result either in fiscal collapse or, if the Federal Reserve Board sops up federal deficits by printing money, hyper-inflation and economic collapse. Either way, the federal government will face extraordinary pressure to curtail entitlement payments, and the Medicaid expansion, as the most recently enacted entitlement, will be the most vulnerable. Virginia needs to insulate itself from the coming fiscal disaster, which is the most foreseeable and inevitable economic catastrophe in U.S. history.
But it’s not enough to “just say no.” If we choose not to expand a failed healthcare model, Virginia needs to dedicate itself, insofar it is possible with an intrusive federal government, to (a) creating a functioning health care marketplace with transparent price and quality data, (2) encouraging innovation among health care providers, and (3) redefining the relationship between insurer and patient. When the national system collapses, with luck, Virginia will have a health system still standing.
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