Originally published in The Free-Lance Star
January 5, 2014
As the General Assembly prepares to convene for the 2014 session, lawmakers continue to debate the future of Medicaid expansion in Virginia.
As I have said many times before, Medicaid should not be expanded in Virginia for several reasons. First, the rollout of Obamacare is demonstrating that government-run health care does not work. Second, Medicaid still needs serious reforms. Third, there is no guarantee the federal government will keep its promise to pay for the expansion.
Instead of expanding Medicaid, Virginia should explore an alternative approach to covering those in the Obamacare coverage gap. We can do this without becoming entangled in Obamacare, expanding a broken program or relying on borrowed federal dollars.
Medicaid expansion is a key part of President Barack Obama’s health care law. Over the last four months, Americans have watched Obamacare unravel. The website barely works, premiums have skyrocketed and millions of health care plans have been canceled.
The troubles with Obamacare indicate that government-run health care programs don’t work well, if they “work” at all. It would be irresponsible for Virginia to become further entangled in Obamacare, and that’s exactly what Medicaid expansion would do.
MEDICAID NEEDS REFORM
Separate from Obamacare, Medicaid needs reform. Costs are out of control, Medicaid is failing Virginia’s most vulnerable patients and the program is fraught with waste, fraud and abuse.
Medicaid is the fastest-growing line item in the state budget. Medicaid has grown by 1,600 percent in the last 30 years. It now consumes more than 22 percent of general fund spending and threatens to crowd out other core services like education and public safety.
Medicaid patients do not receive the quality care that they deserve. One-third of Virginia doctors refuse to accept new Medicaid patients. Medicaid patients are forced into one-size-fits-all health plans that don’t encourage preventive care and wellness.
Putting 400,000 more Virginians into a broken program will make things worse. For Virginia’s working poor, mothers and children, access to care will diminish and the quality of care will continue to suffer.
Medicaid also suffers from waste, fraud and abuse. The Virginia Secretary of Health and Human Services estimates that 30 percent of all health care spending in Virginia is waste. The attorney general’s office won nearly $200 million in Medicaid fraud settlements in 2013. An independent audit in Illinois found more than 225,000 people who were wrongly enrolled in Medicaid. You do not fix a costly program that does not work by making it bigger. We must reform Medicaid before we consider expansion.
INNOVATION AND REFORM
Virginia created the Medicaid Innovation and Reform Commission in 2013 to reform Medicaid in order to bend the cost curve, provide better care and root out waste and fraud.
We are making some progress on these important reforms, but the timeline for completion extends well into 2014 and beyond. Until these reforms are completed and their impact is measured, expansion would be costly and unwise.
But even if these reforms work, Virginia must still consider the long-term costs of Medicaid expansion.
The federal government has promised to pay 100 percent of the cost of expansion for the first three years, and 90 percent after that. We have heard promises before—“If you like your plan, you can keep your plan”—but color me skeptical.
And with the federal government $17 trillion in debt and dealing with massive deficits every year, an IOU from Washington is not worth the paper it is printed on. When the federal government finally addresses its spending issues, it will undoubtedly offload its share of the expansion costs to Virginia.
When that happens, Virginia taxpayers will be on the hook for more than $1 billion in new spending each year. To pay for that, we would have to make drastic cuts to education, public safety and transportation or raise taxes on hardworking Virginians, neither of which are good options.
VIRGINIA ON THE HOOK
Medicaid expansion is the wrong approach. Instead, Virginia should look at alternative ways to help those in the Obamacare coverage gap. I believe an alternative plan should meet three criteria.
First, it shouldn’t rely on federal dollars. Any plan that relies on federal money not only leaves Virginia taxpayers on the hook once that money goes away, it also contributes to the national debt. An alternative plan should and can be paid for using the savings from reforms and a comprehensive, independent audit of Medicaid.
Second, it should provide targeted coverage to those who truly need it without growing the size of government. Medicaid is meant to serve the truly needy—the working poor, single moms and children. An alternative plan should help those who need it the most.
Finally, it should be based on principles utilized in the private market. The plan should emphasize cost sharing, health and wellness, and competition. These principles keep costs down and improve the quality of care.
Virginia is known for its judicious, responsible approach to governing. We must continue to apply that approach when looking at all issues, including health care. Medicaid expansion is at best a risky bet. An alternative approach would be the better path.
William J. Howell has served as Speaker of the Virginia House of Delegates since 2003. He represents the 28th District, which includes parts of the city of Fredericksburg and Stafford County.