By Carten Cordell | Watchdog.org Virginia Bureau
ALEXANDRIA — Virginia simply can’t afford the expanded Medicaid coverage required by the Patient Protection and Affordable Care Act, some lawmakers say.
“When you are talking about adding millions of people (to the health-care rolls), you are talking about a phenomenal cost,” said state Sen. Richard Black, R-Loudoun, who serves on the Senate’s Education and Health committee.
“I know that the (Gov. Bob) McDonnell administration is estimating that it will cost an additional $2.2 billion starting in 2014. These government costs always go up, but even if it’s $2 billion, where does that money come from?” said Black.
“We’re not like the federal government, where the president can call up the secretary of the Treasury and say, ‘Crank up the printing presses.’ We have to pay with hard cash in Virginia,” Black said.
Virginia spent $2.98 billion on Medicaid in 2011, a 15 percent increase over the prior year, according to the National Association of State Budget Officers’ State Expenditure Report.
Covering an estimated 400,000 uninsured residents will force the state’s Medicaid costs even higher.
Virginia Attorney General Ken Cuccinelli, who sued the federal government in a failed attempt to overturn ACA, said the law would cost Virginia an additional $200 million per year. The Heritage Foundation, a Washington, D.C.-based conservative think tank, estimated the total cost for Virginia to expand its coverage between 2014 and 2020 at $754 million.
The exact cost of ACA is mostly unknown, and that’s not good enough for McDonnell.
In a letter to the Virginia General Assembly on Tuesday, McDonnell called for more time to examine how the law would be implemented, and some clarity from the U.S. Department of Health and Human Services on how the expansion of Medicaid coverage would be applied to the state budget.
The deadline to apply for federal fundingto establish health insurance exchanges is Dec. 31, 2014. Virginia has yet to begin that process.
“A great expansion of Medicaid, without significant reform of the current so-called, ‘federal-state partnership’ is not responsible,” he said. “Before an expansion decision is made, we must discuss with (DHHS) the necessity of including clear and fair rules and state flexibility in decision making for the Medicaid program.”
But the widely speculated figures account for only the currently uninsured. ACA includes a loophole that could allow employers to offer incentives to employees with high-risk medical conditions to jettison them from group plans. The workers then would pursue coverage through the health exchanges. The exchanges offer insurance plans that are eligible for government subsidies.
Employers shave the cost of high-risk employees by encouraging them to opt out of group-sponsored plans, effectively dropping them.
The government, then, effectively foots the bill of a more expensive health-care plan while the employers retain lower-risk employees on the group plan at a reduced rate.
Strategic dumping “would simultaneously increase premiums, lower coverage rates, and increase the cost to the federal government of subsidizing coverage for low- and moderate-income individuals,” the article said.
McDonnell will host his fellow governors Thursday at the annual meeting of the National Governor’s Association in Williamsburg.
According to NGA’s release on the meeting, discussion will include strategies on how to lower Medicaid costs.