Medicaid expansion is right for Virginia

by Benjamin Paul

Virginia should expand its Medicaid program without delay. Expanding coverage to as many as 400,000 uninsured, low-income Virginians will save lives. It is also a great deal for Virginia taxpayers and for the state economy.



First, a brief review: The United States established Medicaid in 1965 as a joint federal and state public insurance program for low-income Americans. Once considered an afterthought to Medicare, the federally financed insurance program for the elderly and long-term disabled, Medicaid is now the largest health care insurer in the country – covering over 62 million Americans – and a key foundation of this country’s safety net.

Despite these two programs, the number of Americans without insurance grew rapidly through the second half of the 20th century. By 2008, the U.S. Census Bureau estimated that 46.3 million Americans were uninsured. Nonetheless, attempts at comprehensive reform eluded policymakers.

The tide changed with the passage of the landmark Patient Protection And Affordable Care Act in 2010. The drafters of the ACA envisioned two major pathways for increasing the number of Americans with health insurance. The first pathway was for the federal government to provide sliding scale subsidies to individuals to purchase private insurance through new, online marketplaces.

The second pathway was to mandate that the states significantly expand their Medicaid programs to 133 percent of the federal poverty line. Originally, the ACA allowed the federal government to cut funding to the existing state Medicaid programs in states that refused to expand eligibility. However, the Supreme Court struck down this provision – ruling that the federal government could not coerce the states to expand their programs. The decision to expand Medicaid returned to the fifty states.

Expanding Medicaid would be a giant step forward for Virginia. Despite being one of the wealthiest states in the nation, Virginia has one of the most restrictive Medicaid eligibility requirements. Most parents making over $10,000 per year in a family of four are ineligible. The disabled are only eligible if they make no more than 80 percent of the Federal Poverty Line, or approximately $9,100 per year. Non-disabled childless adults are ineligible for Medicaid regardless of their income.

Expanding Medicaid will save Virginians’ lives. Without insurance, low-income Virginians are forced to forgo care. A common misconception is that the uninsured can receive the care they need at the emergency room. In reality, federal law does not require coverage for most treatments, chronic disease checkups, or preventive care.

Uninsured Virginians who are turned away from care are at risk of getting sicker until their condition is unmanageable. A 2012 New England Journal of Medicine study compared three states that had recently authorized significant Medicaid expansions (New York, Maine, and Arizona) to neighboring states that did not expand Medicaid. The researchers found that the expansions were associated with a 6.1 percent reduction in all-cause morality.

Expanding Medicaid also makes financial sense. The federal government is committed to paying 100 percent of the costs for the expansion population through 2016. Its share will gradually decline until it reaches 90 percent in 2020.

Virginia currently spends hundreds of millions of dollars subsidizing health systems that care for the low-income uninsured. It also helps fund mental health care provided by Community Service Boards to the uninsured as well as health care for state prison inmates. On net, expansion will save Virginia about $600 million over the next eight years.

Expansion will also grow the state economy. Accepting the available federal dollars to cover the uninsured will increase health care spending in Virginia, consequently boosting the health care sector. In addition, the newly insured will have more money to spend on consumer goods. Their additional spending will benefit the broader economy and create jobs. Taken together, the federal investment is estimated to create as many as 30,000 jobs.

Finally, there is a moral element to this debate. By rejecting expansion, Virginia lawmakers are harming their constituents who need the most help. Unfortunately, many expansion opponents in the General Assembly continue to subscribe to the outdated “makers versus takers” ideology. In truth, 70 percent of uninsured Virginians are part of working families.

Medicaid expansion is a once-in-a-generation opportunity to provide health care coverage to more Virginians. Covering as many as 400,000 uninsured Virginians will not only benefit those individuals, but the Commonwealth as a whole. Virginia lawmakers should to the right thing and expand Medicaid without delay.