EDITORIAL: How Do You Pay For Medicaid Expansion?

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The final seat in the Virginia House was filled this week, as Shelly Simonds announced that she would not contest the election results in District 94. That race took place in Newport News, so the actual election doesn’t impact Martinsville or Henry County. Instead, it was what Simonds said in her speech that drew our attention.

“It is with great disappointment that I have conceded this election to David Yancey,” Simonds said. “When I called him, I asked him to vote for Medicaid expansion.”

And just like that, here we are, right back to where the General Assembly ended last session. Let’s be clear: there are people without insurance right now who would benefit from Medicaid expansion. It’s fair to say that it could be extremely helpful for people in Martinsville, Henry and Patrick counties. In fact, it seems like that’s one thing most people in the commonwealth can agree on. Medicaid expansion would help people and that’s worth a lot by itself. But the problem comes in that while people want to put it in practice, nobody seems to agree how to pay for it.

“The federal government will pay for it,” some readers have told us. “We’re already paying for it,” others have said. And on a short term level, those things are true. Yes, under the federal Medicaid expansion plan, the states only have a small portion to pay. In 2018, individual states would be responsible for 6 percent of the expansion cost. For every year after this, the individual states have to cover 10 percent of the cost. But 10 percent is still 10 percent. Go down to the store and pick out a 60-inch HD television and tell the cashier you can pay all but 10 percent. Somehow, we doubt you’ll be walking out of the store with your purchase in hand. As small as 10 percent seems, before we sign off on expansion, we need an agreement on how the commonwealth will cover that cost.

The problem is the sheer cost of Medicaid, presented in 2016 by the annual report of Virginia’s Joint Legislative Audit and Review Commission. The largest growing portion of the state budget isn’t education and it’s not economic incentives. It’s Medicaid.

According to the commission’s report, over the last decade, appropriations for Virginia’s Medicaid program grew by $3.7 billion, a 75 percent increase. The report also found that Medicaid made up 54 percent of all increases in general fund spending over the same time period. Basically, when the budget grew over the last 10 years, more than half the money went into one program. The University of Virginia’s Miller Center found that by 2024, Medicaid’s share of the total state spending would be 14.3 percent, up from 11 percent in the 2013 fiscal year.

So we have a growing program, one that we want to expand even further. How do we pay for that? Well, in his budget proposal last month, Gov. Terry McAuliffe had some thoughts. He suggested paying for Virginia’s portion with a new assessment tax on acute care hospitals. He estimated that would generate about $307 million over two years. That would cover Virginia’s portion of the expansion, but we have some concerns. If you assess a tax to a hospital, the board of directors isn’t just going to absorb that. Nine times out of 10, it’s fair to believe they will pass that along to their patients by increasing the cost of services. In theory then, we would be paying for Medicaid expansion, giving more people health insurance, but doing so by increasing the cost of the services that insurance would help cover.

Is it doable? Absolutely. But is that beneficial to individuals both here and throughout the commonwealth? We question that.

Our suggestion is twofold. First, let’s have the debate in the General Assembly and at least come to an agreement about where the commonwealth stands. How do we pay for our portion of expansion? Are lawmakers even willing to consider expansion? If so, in what form? We need to have answers to those questions. Second, we need to get answers from the federal level, before any expansion happens. It does us no good to expand Medicaid this session if Congress comes back and votes to change or eliminate the Affordable Care Act this year. At that point, in the best case scenario, now suddenly the state doesn’t receive the federal dollars promised and has to find money to cover the full cost of expansion. In the worst case scenario, that’s just not possible and we then have to tell more than 400,000 people that they just lost health insurance. Rather than rush into a decision, we’d like to have all the facts possible and then put it to a vote.

The Bulletin Editorial Board consists of Brian Carlton, Ben Williams and Trisha Long

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Source : http://www.martinsvillebulletin.com/opinion/editorial-how-do-you-pay-for-medicaid-expansion/article_62961946-f703-11e7-9f79-4365d33901dc.html

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