Bacon's Rebellion

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Virginia Dodged the Medicaid-Expansion Trap

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by

James A. Bacon
in ,

Medicaid expansion enrollment double the projected numbers

The 24 states lured into Medicaid expansion under provisions of the Affordable Care Act (Obamacare) collectively experienced twice as many new enrollments as they expected, according to a new report by the Foundation for Government Accountability. While the federal government has picked up the tab for 100% of the costs until now, states will start paying next year an escalating share of the budget that will reach 10% by 2020.

“Newly obtained data from these 24 states shows that at least 11.5 million able-bodied adults have now enrolled in ObamaCare expansion — an overrun of 110 percent or more than double projections,” states the report, “ObamaCare Expansion Enrollment is Shattering Projections.”

House Speaker William J. Howell, R- Stafford, understandably feels vindicated. He and other Republicans in the legislature took heavy flak for blocking a Medicaid expansion that would have extended health care to thousands of near-poor Virginians lacking health insurance.

Howell issued the following statement yesterday:

The report is further proof that Virginia’s decision not to expand Medicaid under the Affordable Care Act is the right decision. Medicaid expansion states have enrolled more than twice as many able-bodied adults as expected, resulting in large cost overruns that create significant budget gaps.

Earlier this month we learned that Virginia’s current Medicaid program will cost nearly $300 million more than expected for FY2018. Every additional dollar spent on Medicaid is one less dollar that can be spent on public safety and education. By not expanding Medicaid, we have protected the Commonwealth from the financial disasters being experienced in other states.

Not only would state taxpayers be liable for bigger expenditures, the Foundation for Government Accountability report argued, able-bodied adults would consume resources that otherwise would go to seniors, children with developmental disabilities, individuals with brain injuries and other vulnerable individuals ” languishing on waiting lists for needed Medicaid services. Mounting overruns will soon exacerbate pressure on policymakers to shift even more money away from the truly needy and toward Obamacare’s able-bodied adults.”

Although the overall enrollment increase was 110%, the actual percentage varied widely between the states — from only 2% above projections for Hawaii to 322% for California. With its large population, adding 3.8 million to its Medicaid rolls, California skewed the national average higher. Among states close to Virginia, Maryland went 62% over projections, West Virginia 84% over, and Pennsylvania 18% over.

Medicaid expansion was supposed to cost West Virginia $429 million in FY 2015. But the actual tab ran $627 million, 46% more than anticipated. Assuming flat enrollment in future years and a 10% state cost share, the expansion will cost West Virginia taxpayers $63 million a year instead of $43 million by 2020.

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10 responses to “Virginia Dodged the Medicaid-Expansion Trap”

  1. Izzo Avatar
    Izzo

    Not sure I follow that logic when it is (or was given the election status) going to be ultimately 90% funded by the federal government. Virginia residents still pay federal taxes to support that, but won’t get anything back from that. The Interstate system has a similar funding model. Should we opt out of that? In general, states that have expanded Medicaid have seen decreases in uninsured rates. Those that have not, have not.

    1. Acbar Avatar
      Acbar

      Your last sentences are very important. Getting more people into the health system spreads the risks and the costs over a broader, generally healthier, base, not merely those who are most at risk or already ill. Getting more people into the health system also spreads the pre-emptive effect of preventive medicine, as well as the economic benefit of less-interrupted employment. Expanding Medicaid is not only a raw cost but has significant beneficial offsets, and so long as we are paying for expanded Medicaid in half the States anyway we are shooting ourselves in the foot not to jump on board.

      As for the election results — the quickest way I can imagine to drive a wedge between Trump supporters and his promises is to repeal Obamacare and replace it with nothing. And what health program, pray tell, is going to provide equivalent medical care in the Rust Belt but Medicaid itself, or something just as costly to the State?

  2. Peter Galuszka Avatar
    Peter Galuszka

    Screw the poor, eh Jim?

  3. LarrytheG Avatar
    LarrytheG

    how can West Virginia be paying $627 million more if the Feds have picked up 100% of the costs until now?

  4. LarrytheG Avatar
    LarrytheG

    The problem with the GOP these days is they can’t deal with realities.

    Where does Mr. Howell think the folks who might sign on the MedicAid get their health care right now if they don’t have MedicAid?

    How about the opioid drug problem? How does he think that will be handled in the Va budget if we don’t have MedicAid?

    How about the mentally ill of which Virginia is now under court order to do something about – which to this point – they have either been putting on the streets or in prison?

    Howell wants to demonize the Feds.

    I ask him what’s his alternative? Just ignore the needs and hope the poor just go off and die and not get medical treatment?

    He should be ashamed of himself and his cowardly behavior toward needs that do exist – in the State of which he is a “leader”.

  5. Steve Haner Avatar
    Steve Haner

    Even without expansion, Medicaid is badly squeezing the state budget – reflecting health care costs generally. Nothing new here but it is getting worse. The state does a two-year budget but the second year of the cycle missed the mark and more than two hundred millions more will be needed just for next fiscal year. If you wonder why state employees don’t get raises, why college subsidies drop and need to be replaced with tuition dollars – Medicaid. Plus the rising cost of employee health care. Plus the cost of inmate health care, and caring for mental health patients who come to state facilities.

    The other parts of the budget taking it in the neck are also for “the poor”, Peter. And much of the Medicaid growth is attributed to the aged who end up in nursing homes – not the working poor at all.

    The 2004 state tax increase was directly related to the misguided (and un-kept) promise of “No Car Tax!” At the time I predicted Medicaid would force another General Fund tax increase, and it has held off for more than a decade – but the cost to every other line item in the budget is getting dire.

  6. Peter Galuszka Avatar
    Peter Galuszka

    Why we need a federal single payer system like the rest of the civilized world

  7. Izzo Avatar
    Izzo

    I probably wouldn’t agree with Pete on too much, but I do on this. The economic conditions do not exist for a privatized system to work in healthcare. Free markets are great where these conditions exist, but healthcare is not that type of market. Patients don’t have the knowledge or information to make good choices.

    The skyrocketing cost of healthcare and higher education, and above average defense spending on a percent of GDP basis are crippling our competitiveness. With these fixed, the U.S. would be transformed.

  8. LarrytheG Avatar
    LarrytheG

    MedicAid is NOT squeezing the Va budget. The citizens of Virginia who work and don’t have insurance is what is squeezing Virginia’s budget – and they’re going to do that – with or without MedicAid unless one “thinks” they’re not going to go to ERs or get other medical care whose costs are transferred to other taxpayers.

    it’s totally dishonest to say MedicAid is “the problem” when we’re actually talking about real Virginians who have real medical needs and we’re playing this deflection game as if Medicaid and the Feds is the problem and not Virginia’s and our own – feckless and irresponsible behavior towards the needs of our own citizens.

    Not that long ago, Jim posted an article about the “crisis” in Virginia over the opioid epidemic and that it needed to be dealt with. How do we think we’re going to deal with it – pretend it doesn’t exist when the money part comes up?

    Every one of us that walks into a 7-11 or has trash-pickup or has someone come to our house to repair something or drives UBER or works as an independent contractor – should be ashamed that we, as individuals, CHOOSE to evade our own responsibility – and characterize the Medicaid issue as a budget issue imposed on us by the Feds – as if none of us have any role ourselves in doing something about our own fellow citizens and neighbors who need medical care while we ourselves enjoy subsidized govt health care.

  9. LarrytheG Avatar
    LarrytheG

    Apologize for my harshness…

    but …

    If we – Virginia cannot afford to provide healthcare to some of our citizens – that’s the way we should frame the issue – and own it – not blame the Feds or MedicAid.

    we should be honest with ourselves and take responsibility for that decision.

    The way Howell is doing it – is not honorable.

    It makes me wonder why – if he resent the Feds so much – he just doesn’t pull out of MedicAid all together -and “save” the Commonwealth all that money in the budget.

    And if that’s what Virginians truly want -and he and others can stand for election on that basis – and get elected – then I am totally fine with that decision – the people have spoken and whether I like it or not – I respect the basis of governance for our country.

    but I DO THINK – all of us – voters and elected – should honestly own the decisions we make.

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