An Alternative to Expanding Medicaid: Expanding Free Clinics

Del. John M. O'Bannon III
Del. John M. O’Bannon III

by James A. Bacon

With all the bad press that Virginia’s Medicaid program has been getting recently, the prospect of the General Assembly enacting an expansion of the health care entitlement in 2016 are just about nil. First came a report last month that the state wasted $21 million last year paying Medicaid benefits to recipients who no longer qualified. Then the McAuliffe administration revealed that the state share of funding Medicaid is forecast to surge in the next two-year budget cycle, boosting the annual cost from $7.9 billion in fiscal 2015 to $9.3 billion in fiscal 2018.

That’s without expanding Medicaid as allowed for in the Affordable Care Act. While the federal government has covered 100% of the cost for an introductory period, state governments will have to begin paying a share of the cost beginning in the next fiscal year, eventually topping out at 10% of the added spending.

Virginia Republicans have held fast against expanding the entitlement. Their primary argument has been one of fiscal responsibility: Every state dollar spent on Medicaid is one less dollar that can be invested in K-12 schools, higher education, and other pressing state needs. But Medicaid doesn’t exist in a vacuum. It needs to be seen against a larger backdrop of reforming a largely dysfunctional health care system and a tattered social safety net.

Yesterday I sat down with Del. John O’Bannon, R-Henrico, a practicing physician who happens to be vice chair of the House Health, Welfare and Institutions Committee, to discuss the wellness (or lack of it) of Virginia’s health care system. The thrust of my questions was this: It’s all very fine to oppose Medicaid expansion on fiscal grounds, but the health problems of poor and near-poor Virginians are real. What do Republicans propose as an alternative?

His answer comes in two parts. First, the General Assembly has steered more funds into the state’s mental health programs and into free clinics. Said O’Bannon: “We’re for strengthening the safety net.” But he prefers programs that Virginia can control without federal interference or that leverage private-sector philanthropy. Second, the state should do more to promote competition and transparency to contain medical costs and improve outcomes for all Virginians, including the poor. In this post, I’ll focus on the first approach.

In the current fiscal year, the General Assembly approved $125 million in new safety-net funding for mental health, free clinics and Federal Health Centers.

Of that amount $96 million is dedicated to SMI mental health, which, with an equal match from the feds, should treat 20,000 people with serious mental illness. (SMI stands for Serious Mental Illness.)

The balance of the new funds supports free and affordable clinics, which provide physician care, x-ray services, lab services, immunizations, preventive services, prescription drugs, and some dental care to Virginians lacking other health care coverage. According to, there are 254 clinics in the state of Virginia. Some clinics are federally sponsored Community Health Centers, which may charge patients a fee, depending on income, while others are entirely free. While coverage does not extend into every nook any cranny of the state, it is extensive. In Southwest Virginia, the mobile Health Wagon fills in some of the gaps by providing care services to residents of 11 counties.

State funds complement charitable donations and professional time contributed by doctors, nurses and other volunteers, while the Virginia Health Care Foundation works with pharmaceutical companies to contribute prescription drugs.

Although free/affordable clinics do provide primary health care to hundreds of thousands of Virginians, the health safety net is “stretched as never before,” states the website of the Virginia Health Care Foundation. “Free clinics reported up to a four-month wait for patients seeking a first appointment. Some have instituted lotteries to determine who can receive care. Other clinics are simply unable to accept new patients because of capacity and/or resource limitations.”

As imperfect as the safety net may be, Virginia’s dense network of free/ affordable clinics is “unique” in the country, says O’Bannon. By comparison, he says, Maryland doesn’t have a single free clinic. Instead of expanding Medicaid, with its arbitrary rules and fiscally unsustainable cost, Virginia should focus on strengthening its home-grown institutions that are inherently closer and more responsive to the community.

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15 responses to “An Alternative to Expanding Medicaid: Expanding Free Clinics”

  1. Peter Galuszka Avatar
    Peter Galuszka


    First, many low-income Virginians are already helped by Medicaid. ARe they supposed to go off Medicaid and go to free clinics where the funding is dicey?

    e’re talking about those 400,000 or so Virginians who didn’t previously qualify for Medicaid because they made too much money but not enough to really get other medical insurance help.

    This whole idea is nuts. Let them eat free clinics? How can you guarantee they will be funded year after year.

    I can find plenty of doctors who see some kind of single payer system and the country’s only real solution. Dr. O’Bannon is a conservative Republican, right? ’nuff said.

  2. fredinrva Avatar

    Wow, $21 million in waste in a $7.9 billion program. 0.2% waste ratio. Find me a private insurer with that low a percentage of “wasted spending” and I’ll buy you a few tasty locally brewed beers. This was an engineered audit intended to tar and feather Medicaid in the press and further reduce the chances of passing a Medicaid expansion and the Post and others drank it up like penny beer at a frat party. What a bunch of rubes.

    Oh and how kind of the GA to provide a measly $125 million in funding for free clinics and the like. That’s less that 6% of the annual funding for Medicaid expansion that would be 100% paid for by the Feds. Thanks for the crumbs guys.

    Oh and the GA would only need to come up with an addition $85 million a year to cover the 10% match in future years if they used that $125 million for Medicaid expansion. Come on Jim, stop feeding us such weak tea; these ideas are worse than band-aids on bullet holes.

    1. Yeah, I agree that the $21 million in improper payments is a pretty small number, relatively speaking. And the $125 million for mental health and free clinics is chump change compared to Medicaid expansion. But I would agree with O’Bannon that the network of free clinics is highly cost effective. It certainly doesn’t pay for everything that Medicaid expansion would, but it does provide an alternative model for providing primary care to poor people. The General Assembly should consider putting even more money into the clinics.

      In the meantime, the General Assembly needs to move more aggressively to reform the organization and delivery of health care in Virginia to drive down costs and make care more accessible financially. I’ll address that tomorrow.

  3. TooManyTaxes Avatar

    The issue is not the waste. It’s the growth from $7.9 B to $9.3 B. Even without expansion, Medicaid cost growth is likely one of the largest, if not the largest, increase in state spending, according to Fairfax County delegates and senators. North Carolina twice (once with a D governor and D legislature and once with an R governor and R legislature) had to cut state aid to K-12 to fund Medicaid growth. And the cost estimates for expanding Medicaid are likely low. Look at both Washington and Oregon. Show me the language in any proposed legislation that will prevent similar results from occurring in Virginia.

    Peter, there is no way single payer will pass in the United States. Even in lefty Vermont, the state had to give up. The increases in payroll taxes necessary to fund single payer, welfare health insurance would be unaffordable. How big of a take home pay cut are workers willing to accept to move to single payer? Plus to move to single payer would require those whose insurance coverage is better (including labor unions) to accept less under single payer. How many federal employees and retirees are ready to have their benefits cut? How many state and local employees and retirees are ready to have their benefit cut? The average American is not willing to make any personal financial sacrifice to move to single payer.

  4. LarrytheG Avatar

    hypocrisy is the name of the VA GOP and like-minded in this issue as anything they claim they would spend – it would cost 1/10 of that if they took the money all of us are already paying in taxes to fund the expansion.

    That’s the bottom line.

    you want more clinics? you can build 10 times as many for the same state money if you add the money that Va taxpayers have already paid and will continue to pay through the separate taxes that fund the expansion.

    this makes as much sense as turning down Federal highway money – which is also not funded from general revenues.

    so the GOP and others are insisting on what is basically a lie – to sustain their ideology and hypocrisy.

    we pretend that we’re not already paying out more than a billion dollars a year for uncompensated care.

    and remember this is not “safety net” for the old, kids and poor – this is for working people who provides services to all of us – every day and who have their own families and we continue this ideological idiocy.

  5. Peter Galuszka Avatar
    Peter Galuszka

    No single payer in the U.S. ever?

    They said that about Social Security.

    They said that about Medicare.

  6. LarrytheG Avatar

    re: single payer

    I think about 70% of workers in the US have employer-provided and truth be known – it walks and talks like single payer …. to those who have it.

    they really don’t care who the insurer is – as long as they get whatever insurance is offered and it “covers” them.

    and none other than Republicans like Mitt Romney have said that as long as our policies unfairly subsidize employer-provided insurance but not market insurance for those who do not have employer-provided that we will have an expensive and dysfunctional system where we pretend that are not paying for those without insurance.

    ” Mitt Romney vs. employer-provided healthcare insurance”

    if the govt – Federal, State, and Local stopped offering employer-provided insurance – the current system would fail.

    and make no mistake – when we talk about unfunded liabilities for pensions – it includes the costs to continue to provide health insurance to retired employees..

    and imagine what would happen to the Armed Forces if they stopped offering employer-provided for families and required them to go into the market to get health insurance.

    so yes – we do not have single-payer – in no small part because the govt subsidizes employer-provided insurance for those lucky enough to work for the government as well as those who are guaranteed insurance through employers.

    it’s a farce… that allows hypocrisy from those who directly benefit – who then turn around and deny that benefit to others.

    1. TooManyTaxes Avatar

      Gentlemen. You can make all the arguments you want for single payer, but its adoption will require a significant number of people to lose better coverage. And people don’t like that. Call it hypocrisy. Call it unfair. But also call it reality.

      As far as government employees accepting their health insurance is a subsidy, write an op-ed in the Post or any other media outlet in the state and see what response you get. Testify to a local budget hearing and tell the local cops, teachers, planners, etc. that their benefits are an unfair subsidy from taxpayers. See what happens.

      Life is not equal. And that includes pensions, health insurance, bonuses, and day to day life. Equalizing things create losers. Neither of which occurred with either Social Security or Medicare. Both of those programs were greenfields programs. Everyone was treated the same. Pay taxes while you are working and you will receive when you retire. No one had to give up any existing pensions or employer-provided health care insurance for those programs to be started. Implementing single payer health coverage requires people with existing benefits to lose them. And give up take home pay with higher payroll taxes. The American public will not accept this no matter what names you call them.

  7. LarrytheG Avatar

    dunno how you think people will lose coverage – where do you get that?

    re: people accepting facts – yes.. we have that problem these days but it don’t change the facts:

    1. – 330 billion dollars a year is what it costs for employer-provided health insurance – to all taxpayers – including those who don’t get it

    2. – without HIPPA – many who have employer-provided would not have it at all – if the insurance company could use the same practices they would use in the marketplace to turn down those with health problems.

    3. – without HIPPA – people would not pay one price for insurance – they would pay according to their health status.

    If you want to repeal EMTALA – why not HIPPA also?

    It’s true – Life is NOT equal – but the govt is not life and the govt is required by the Constitution – that if it is going to have policies – that those policies do not treat people inequitably.

    if the govt is going to provide tax-free money for insurance – it should do so for everyone – not just those with employer-provided.

    if the govt is going to require insurers to take people with expensive health conditions – for employer-provided – it should do so for others also.

    I’m no arguing for single-payer – I just point out that where single-payer exists – people pay less for health care – and they live longer.

    that’s a fiscal argument – not a moral one – and one the pretenders continue to use moral arguments against…

    we’re going to pay for the uninsured – that’s a fact.

    doing so in the most bone-headed fiscally irresponsible way seems to be the preferred approach….

    we have a “right” to be niggardly – even when it costs us more, eh?

    1. TooManyTaxes Avatar

      So when are you going to run for Congress on a platform to take away the tax benefits of employer-paid health insurance?

      For the umpteenth time, I don’t believe expanding Medicaid is cheaper than the status quo. The health care industry is lobbying for Medicaid expansion. Using your logic, they are lobbying to get less money than they get from reimbursement for care for the indigent. The Democrats (at least the ones in Fairfax that I’ve talked to) refuse to require the cost savings generated by your proposal back to taxpayers and premium payers. Is it because they know there will be no savings?

      Why don’t you give up the fiscal argument and just say “I want Medicaid expansion at all cost”? Essentially, boiled down, that’s your argument.

  8. I want to know how you got to talk to him. I have trouble getting any response back from these people. I’m going to keep after them, because I’m going to start calling and say why didn’t you respond? Do you think that it is right to stiff taxpayers and Virginians over the millions wasted for a health professions dept and the conflicts of interest, the refusal of the governor to reform the medical board (a la US Supreme Court decision)?

  9. The Truth Avatar
    The Truth

    With regards to the support for Safety Net Providers, I agree with your statement “While coverage does not extend into every nook any cranny of the state, it is extensive” and this is why I disagree that the General Assembly should continue to provide funding for “free clinics” in areas where there is adequate Community Health Centers (FQHC) and programs such as the Virginia Coordinated Care Program.

    According to statistics provided by the Virginia Health Care Foundation in 2014 The Daily Planet and the Capital Area Health Network served 18,591 patients. The Virginia Coordinated Care Program served 30,000 which totals 47,591. NO MONEY from the 6.9 million dollars that was allocated to the “free clinics” from the 2015 Acts of the General Assembly will go towards any of these programs.

    These funds get channeled through the Virginia Association of Free and Charitable Clinics and clinics must be a member in order to receive any funding. The “members” have to pay “membership dues” and 10% of the total funds they receive back to the Virginia Association of Free and Charitable Clinics as an “Administrative Fee”.

    These funds are only intended to be used for “services provided to documented, legal residents of Virginia”. There are no audits conducted nor is any type of documentation or accountability required to substantiate the use of the funds. The same thing is true for the funding provided to RX Partnership by the Virginia Healthcare Foundation. I am not suggesting “undocumented immigrants” should not be afforded healthcare but Del. O’Bannon needs to make this transparent with the taxpayers of Virginia so they are aware these funds are being used for a purpose other than what they were intended.

    There are other “clinics” in the Richmond area which include Access Now, Center for High Blood Pressure, Cross Over Ministry, Fan Free Clinic, Bon Secours Care A Van, Conexus, , East End Pregnancy Center, IVNA Health Services, Planned Parenthood AND the local health department clinics. This does not include the free clinics Goochland, Hanover, Powhatan and other nearby localities.

    How many “free and charitable clinics” does Richmond need?

    The Virginia Coordinated Care Program at VCU is considered a “model program” and includes inpatient hospital care. It has exceeded expectations managing the healthcare of Richmond’s uninsured.

    With this much success and for the benefit of all those who are uninsured I would hope Del O’Bannon will advocate for more funding to expand this program and consider establishing something similar in the Southwest part of the state. By consolidating the operating expenses for each of these free standing clinics there would be a significant cost savings. Partnering with The Daily Planet and The Capital Area Health Network would guarantee every uninsured person in the City of Richmond would have access to quality healthcare.

    A misconception is that “free clinics” do not receive Federal/Government funding. Their funding is “passed through” the Virginia Department of Health who receives grant awards from Federal agencies as the “Grantee” and then contracts with the clinics who are considered “Sub Grantees”. They are subject to all the Federal Policies and Procedures including reporting the revenue on their 990 Tax Filings. The Fan Free Clinic received $1,029,154 in Government funding for fiscal year 2013 and Cross Over Ministry receives 14% of their total revenue from Federal/Government funding according to their annual report for 2015. It also states 12% of their income comes from Patient Contributions. They charge patients a fee based on their income the same as Community Health Centers.

    Why would anyone believe if there was an audit report about Virginia Medicaid recipients receiving benefits that were not eligible because they claimed they had no income it would be any different for a “free clinic”? According to the Virginia Healthcare Foundation “Full-time workers and their families make up 50.5 percent of the uninsured in Virginia and are distributed over all income levels”. The report also states 48% of the uninsured in Virginia were living ABOVE the Federal Poverty Level. Where do you think several of these people are getting their healthcare from? There is NO governance or regulations for these non-profit free clinics when it comes to their eligibility screening process.

    Several of these patients ARE eligible to enroll in an affordable healthcare plan through the Insurance Market Exchange that would cost them less than they pay per month for I Phone/Smart Phone cell service. The clinics are not enforcing the requirements of the ACA with the patients and there is no one to monitor this and hold the clinics accountable. These clinics are operating as “businesses”. Since there are so many in the Richmond area each patient who follows the law would be a loss to them.

    1. Truth, thanks for the illuminating, fact-filled response. I now stand forewarned that the issues swirling around the free clinics — almost entirely out of the public eye — are far more complex than most people (including me) would imagine.

  10. Bacon, this is ridiculous. You know, I used to think you were a reputable, credible, unbiased data driven blog we could rely on without the conservative talking points. If at first your post last month on the liberal media bias being real (false) without any in depth data analysis to support it didn’t do it for me, this post did.

    Free health clinics? Are you kidding me? You really think this is a sensible solution? Mobile clinics? Dude, is this Guatamala or Honderus? Seriously, it’s 21st century Virginia, why should our people be forced to beg for the scraps of rich merciless aristocrats?

    How can you objectively argue that it’s either fund k-12 or fund Medicaid expansion? Divide and conquer strategy? MAYBE we should actually change the tax structure to provide more funding, reduce hand outs to corporations, or cut wasteful military spending instead? Why do you reside that expansion must come from rigid K-12 fund?

    I’m somebody who earns too much for Medicaid but not enough for the VA ACA tax credit. I have a variety of health issues that require regular medication and specialist visits. Please tell me which free clinic will have a Gastrointenstional doctor I can see monthly.
    Please tell me how those of us not worthy of affordable insurance can find a cardiologists, psycologist, dermatologist, or whatever other speciality physician to manage whatever conditions that ail us?

    No, you can’t because free or mobile clinics are LAST resort for emergencies. They are not for routine, regular preventative treatment which if neglected, ultimately costs tax payers more.

    No James, your blog makes hardly a mention at all about this or any other realities. You see Medicaid expansion as somehow being about fiscal responsibility-ignoring that it is a humanitarian crisis and right deserving of top priority for ALL-something which CAN be affordable to the Commonwealth if we really wanted it to be.
    Instead hacks like you try to fool us it’s nothing more than cold-hearted GOP greed and retribution against anything Obama proposes.

    Shame on the Virginia Chapter of the Anerican Planning Association for having YOU as their keystone speaker at the July 2014 conference. Planners support scientific facts and policy, this just proves the VA chapter is a puppet for the dismal selfish VA HOD GOP agenda.

    At least somebody like the Breitbart network is upfront with their agenda, shame on you though for disguising yourself as someone above partisan ideological bias when you’re just more subtly disseminating GOP talking points like a snake in the grass.

  11. If we supported local farmers and the healthier food they can provide, less McDonalds/Taco Bell/Pizza Hut, we wouldn’t need as many doctors in the first place. If we got stores to stop their refusal to put tomatoes in the stores, no matter what the size, or let people pay less if it is dinged, people would know what real food is supposed to look like and be healthier.

    If parents spent time with their kids, had fewer kids, the ones’ they could support, if education was highly valued, we would spend less on education.

    Society and culture are the problems: fix the values, you will not be having the discussion in the first place.

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