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Virginia’s Medicaid debate / March 01, 2018
Dear Viewpoint:

The question of whether or not to expand Medicaid under the Obamacare federal law is now taking all of the oxygen out of the room in the General Assembly. And it’s in the form of a new debate between the House of Delegates and the Senate over Virginia’s two-year budget that must be signed into law this year before we adjourn in the next two weeks.

This week, both the Senate and House ostensibly voted down the other’s Budget by approving their own. The hard negotiations now begin as both Chambers send their Conferees in to hammer out a single Budget agreement that will be considered, debated and voted on once again in both Chambers before it goes to the Governor.

Before we discuss whether it is good policy to expand Medicaid in Virginia, it is necessary to understand the Medicaid program as it currently exists in our state. This program, in its current and unexpanded form, consumes 21 cents out of every dollar of tax money that the state generates from its citizens, providing healthcare coverage to 1.3 million citizens (in a state of a population of 8.4 million people), who the state deems to be the most vulnerable, older adults, individuals with disabilities, children in low income families, parents, caregivers and pregnant women. The program as it exists today, without federal Obamacare expansion, grows at an annual rate of 9%, with total state spending of approximately $8.5 Billion dollars a year. Just this year, for the upcoming budget, the General Assembly had to dedicate over a half a billion dollars of existing taxpayer revenues just to account for the organic increases in Medicaid spending, before even considering expansion. Such increases in the state budget are expected to continue, which will significantly affect Virginia’s ability to dedicate necessary funding to other priorities, such as public schools, public safety and our first responders, care for our veterans, economic development, state infrastructure (our roads, bridges and highways), and other state government programs that would benefit all Virginians.

Medicaid expansion, under the Obamacare program, offers federal dollars to expand coverage to up to 400,000 able-bodied workers who are economically at between 100% to 138% above the state poverty level, closing the gap created by Obamacare that did not capture those citizens in its other health insurance plans. While the federal government would pick up 90% of the expansion costs for now, with the state picking up the remaining 10%, it is not guaranteed, especially from a federal government that seems unwilling to pass its own budget in the last 9 years, and currently has a debt of $22 TRILLION dollars and growing out of control. Realistically, the federal government would more than likely pull back its financial commitment to Virginia to cover 90% of the Medicaid expansion cost (currently Virginia splits the existing cost of the Medicaid program with the federal government 50/50), leaving our state with the future significant problem of finding over a Billion Dollars from Virginia taxpayers to continue funding this initiative, on top of the 9% biennial organic growth in Virginia’s budget cycle we already incur, without expansion. That is why I find Medicaid expansion under Obamacare in Virginia unwise, and not financially prudent both now, and in our future.

Regarding the two proposed versions of Virginia Budget for the next two years, in a nut shell, the Senate’s version of the Budget does not contain $450 Million dollars the House hopes to capture in federal dollars (used for spending on state programs that we would otherwise have to pay for) from accepting Medicaid dollars from the federal government, while the House version does. And boy, does the House want to capture that money, and spend it all on things unrelated to healthcare for Virginians. Ironically, or perhaps intentionally, the House version spends the bulk of its budget on such things as dredging of the Norfolk Harbor ($350 Million dollar) and a big-ticket item in Northern Virginia that would establish a new cyber security education initiative ($50 Million dollars), just to name a couple. Most notable is the lack of significant funding for our rural and underserved areas, including but not limited to Southside and Southwest Virginia. Most of the spending from the capturing of federal dollars proposed by the House is in the wealthier areas of Virginia, such as Northern Virginia and the Hampton Roads/Norfolk regions. This is unacceptable to me. The House Budget in essence spends the bulk of its money on non-medically related items for a very simple reason: the House is betting that the federal government would deliver on its intention to send roughly an additional $2.5 Billion dollars to the Commonwealth each year if it expands Medicaid. The House wants the federal money, not for health-care reasons, but for pork-barrel reasons. The House version is the largest expansion of state government in Virginia in a long time.

Should the federal government decide not to fund its share of Medicaid at some point down the road (and trust me, it won’t), it exposes the tax payers of the Commonwealth to the possibility of higher taxes as well as having a negative impact on all of the state supported services. To gamble the long term economic stability of Virginia on a flawed and financially untenable program such as Medicaid expansion is just something that I will not do as your state senator. I have always believed that Virginia cannot bank on monies from the federal government to allow us to financially operate for the good of all citizens. Our state Constitution requires the legislature to maintain a balanced budget. Risking our financial future on the whims of the federal bureaucracy is nothing more than a wish and prayer, and is not how we should be governing. While I firmly believe we must care for those who cannot provide for themselves, there are limits to what we can do, for we must not mortgage our children’s future (like our federal government has) here in Virginia. There is a better way. Medicaid expansion is not that way.

Senate Republicans are taking a very different approach. We are advancing a healthcare package of our own, one focused on lowering the cost of coverage and the cost of care for all Virginians. With affordability a top priority, we approved several bills that will increase insurance choice for areas with only one carrier, expand the low-cost catastrophic care coverage option, and increase the number of waivers for intellectually and developmentally disabled Virginians. Those bills are currently in House Committee for their review.

One bill, Senate Bill 844, would allow more Virginians to opt for less expensive “short term” coverage plans. It would also place requirements on health insurers to offer plans in more areas of Virginia. The bill will help to reduce costs and expand options for consumers.

Another bill, Senate Bill 935, would expand the availability of group insurance plans, allowing more Virginians to participate in insurance “pools.”

And, Senate Bill 964 would allow more Virginians to qualify for catastrophic health coverage plans, which provide essential health benefits. These plans are a lot less expensive than the plans available on the exchanges, but are currently available only to those under the age of 30. This legislation removes that age limit, making the plans more widely available – and bringing affordable coverage to more Virginians.

Finally, Senate Bill 915 sets priorities for healthcare funding, including waivers for Intellectual and Developmentally Disabled Virginians. There is a current backlog for these waivers of more than 3,000. This bill also prioritizes funding to increased mental health and substance abuse treatment. Effectively, this bill is a roadmap to how Virginia should allocate and prioritize future healthcare expenditures.

Our legislative healthcare reform package has won widespread, bipartisan support. The four bills noted here were approved without a single dissenting vote in the Senate, a rare feat on an issue that has become very contentious lately.

The Senate Budget Bill (SB 29) provides over $565 million dollars in funding for our public schools. The Senate plan increases per pupil funding for the Virginia Preschool Initiative. Additionally, the Senate plan prioritizes healthcare. Its behavioral health package spends $73 million dollars over two years. Further, the plan expands same-day access at Community Services Boards, includes support for diversion programs, and provides the funds for 56 new beds at Western State Hospital. It also adds 825 waiver slots for intellectually and developmentally disabled Virginians.

In summary, the questions pertaining to Medicaid expansion and the new Budget are numerous. My concerns for expanding the current Medicaid program with ever increasing costs that will eventually exceed the financial means of the Commonwealth remain very high. I am committed to a balanced budget while also ensuring that any changes to Virginia’s Medicaid program would only address those citizens who are the most vulnerable. I do not believe that the Federal government will be able to continue to fund Medicaid expansion at the 90% levels as they have indicated. We already are hearing rumblings out of Washington that the unsustainable $22 Trillion dollar national debt must be reduced, and one of the ways to make that happen could be with reductions in federal payments to the Virginia Medicaid system as we know it today. When this occurs, the State (the tax payers) will have to make up the difference either in a reduction in public funding for our first responders, law enforcement, educators, government, etc., or an increase in taxes, or both. As I said previously, just the yearly organic increase of 9% Medicaid program without expansion is already a challenge to balance the Virginia budget each year.

The Senate Budget Bill, SB 29, a balanced budget proposal that does not expand Obamacare, was passed with a bi-partisan vote of 25 to 15 on Thursday. I voted in favor of SB 29. I expect that the Conferees from both the Senate and the House will begin discussions as early as this weekend to come to agreement on a single Budget Bill that both Chambers would then vote on. However, if the final budget proposal contains a provision for Medicaid expansion as detailed above, my vote will be “No”. Stay tuned.

Senator William Stanley
20th Senate District, Virginia

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