What does the federal highway trust fund have to do with Medicaid expansion?

By: Speaker Bill Howell

In today’s Richmond Times-Dispatch, Virginia Secretary of Transportation Aubrey Layne warns of the potential loss of significant federal funding in transportation. The federal Highway Trust Fund is, as Secretary Layne says, “running on empty” and Virginia faces the prospect of losing millions of dollars in federal funds if Congress doesn’t act.

This should be a huge red flag when it comes to Obamacare’s Medicaid expansion. You’re probably asking, however, what does the federal highway trust fund have to do with Medicaid expansion?

Under the Affordable Care Act, states have the option to expand their Medicaid programs. In Virginia, expansion could add up to 400,000 Virginians, including many able-bodied, working adults, to an already costly Medicaid program. This expansion could cost up to $2 billion per year. The federal government promises to pay 100 percent of the cost of expansion until 2017, and 90 percent of the cost after that.

But if the federal government can’t afford to keep its current commitments to something as fundamental as building roads and bridges, how are they going to pay for Medicaid expansion in Virginia?

The fact is, the federal government simply cannot afford an indefinite commitment. That means, Virginia taxpayers will be on the hook.

In his op-ed, Secretary Layne outlines how Virginia uses some of its federal transportation funds, explaining something called “GARVEE” bonds. These are bonds sold by the state, paid back through future federal transportation dollars. As Secretary Layne writes, “States entered into these arrangements based on an understanding that future federal funds would be available.”

This is the exact same deal states are now being asked to make on Medicaid expansion. The federal government says if Virginia expands its Medicaid program, we can count on federal money to pay for it.

It would be irresponsible to expand a program like Medicaid, which already costs Virginia taxpayers over $4 billion per year, based on an I.O.U. from Washington. Secretary Layne’s op-ed on transportation makes that point very clearly.