The Supreme Court ruling on Obamacare now presents Virginia with a huge decision. While most attention has focused on the legality of the Obamacare “mandate,” the Supremes also determined that Congress cannot compel the states to participate in the expansion of Medicaid. Thus, the General Assembly will have to decide whether or not Virginia will participate.
The Affordable Care Act expanded Medicaid to cover all adults below 138 percent of the federal poverty level beginning in 2014. Uncle Sam will pay the tab for this expansion through 2016, but then the states will pick up an increasing share of newly added costs, culminating with a 10% share in 2020.
In a 2010 study, the Heritage Foundation contended that the measure would expand Medicaid enrollments by $18.4 million people nationally, and by 389,000 in Virginia. The cumulative cost to state government nationally would be $33 billion between 2014 and 2020. Virginia’s share would be $754 million.
The Washington Post sums up the states’ dilemmas this way:
“States are going to weigh leaving huge amounts of federal dollars on the table, versus accepting potential exposure from expanding an entitlement program. … You used to just have to hold your nose because you had to do it. Now, every state is going to have to make some aggressive calculations.”
Those calculations pretty much boil down to two incentives, pulling in opposite directions. On the one hand, there’s a deep pot of federal money for states to expand their Medicaid programs. On the other, there’s the fear of getting even more saddled with bills from an increasingly expensive entitlement program.
Interestingly, Virginia was one of the states that did not argue against Medicaid expansion in the Supreme Court suit. However, Virginia Republicans seeking to roll back any piece of Obamacare that they can surely will contest it. Medicaid will become the budgetary battle royal of the 2013 legislative session.