Wonk Corner:  Briefing on Medicaid Expansion

You have to read the footnotes:  The state estimates that should Virginia approve an expansion of Medicaid to an additional 300,000 low income persons, about 60,000 people now covered by individual ACA plans will revert to Medicaid.

That snippet is buried in a presentation made yesterday to the Senate Finance Committee by its staff, which is a great introduction for the non-experts among us.   Whether and how to expand Medicaid is, of course, the main sticking point which has prevented adoption of a state budget.

And by agreeing to a new hospital tax to provide the state’s share of the cost of expansion, the House of Delegates was able to authorize more spending than the Senate in several other key areas of the budget – all politically popular with somebody, creating a minefield of sticking points.

The hospital tax actually will reduce by 40 percent the financial benefit of Medicaid expansion to many of the hospitals serving that population, and the staff report notes that some hospital leaders are pushing a higher tax in order to increase their fees for Medicaid services to 88 percent of their costs.

The staff’s short list of advantages and disadvantages to the hospital tax fails to even raise the possibility that one way or another ultimate costs to consumers will rise further.  This is a new tax, a tax on a service.  It will be imposed on private hospital revenue from all sources – private pay, Medicare, ACA plans, major insurance carriers or the myriad other choices consumers use.  The tax is not imposed on other providers who will treat these newly-covered patients.

The staff also went through a list of conditions and variations to the traditional Medicaid coverage that Virginia might consider to control costs.   The House of Delegates has opted for a work or job training requirement.  One other option is creating health savings accounts. Right, somebody working in a fast food restaurant has the cash flow to fund an HSA.  Please.

As you will note on slide 15, the Senate has voted to expand Medicaid as well, but with a very limited new caseload.  Majorities in both chambers are on record supporting benefits to people at 138 percent of the federal poverty level, up from 100 percent.

The expectation is that the Senate Finance committee will hash all this out this week and have something to present to the full Senate by May 22.  It is possible unofficial discussions on the final compromise are already going on between some of the leaders in both chambers, but no official conference committee can be named until the Senate actually acts on a full budget.

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3 responses to “Wonk Corner:  Briefing on Medicaid Expansion”

  1. Wow, 60,000 people will drop out of Obamacare plans to go on Medicaid? Amazing what you find in the footnotes!

    I’m sure that the Obamacare coverage of those 60,000 lower-income workers is subsidized, but one still has to be wonder if Medicaid coverage will cost taxpayers more than the Obamacare subsidies.

    More to the point, it undermines the case for Medicaid expansion to acknowledge that 20% of the beneficiaries already have health care coverage! Can’t eligibility requirements of Medicaid expansion be tinkered with to avoid that cost shifting to the state?

  2. TooManyTaxes Avatar

    JAB – we can sure tell you never worked for the Post. Imagine exposing the fact that 20% of the uninsured are in fact insured. That is outrageous that the public didn’t know that until now. And people wonder why fewer and fewer people respect members of the MSM.

  3. LarrytheG Avatar

    This is a misunderstanding here. The folks who currently have Obamacare are on the bottom rung and have minimal insurance and it’s all paid for with Obamacare.

    The funding that funds Obamacare is the same funding that funds the Medicaid Expansion. It just moves some of them from on type of insurance to another – both paid for from the same source – earmarked Federal taxes that all Virginians already pay.

    If you don’t understand how Obamacare and the Medicaid Expansion are actually funded – you need to get yourself informed because if you don’t understand this – you really don’t understand the issue.

    Now… if Congress ever does – kill these taxes that fund Obamacare and the MedicAid expansion then.. all hell WILL break loose… and we’ll end up with ALL of those on Obamacare AND the Medicaid Expansion no longer have coverage of any kind.

    So is this what the critics really want? just dump all those folks off of any coverage at all?

    see this is the problem with the critics… they have no plan… at all.. and what they want is really more chaos…

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