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Friday, June 11, 2010

Improving Medicaid Coverage Would Mean More Insured Virginians

Virginia's Medicaid system covers certain low-income, disabled, elderly, and young people. Medicaid in Virginia system is one of the stingiest in the United States - 47 states allow people with higher incomes to participate (in Virginia you have to be extremely poor). The cost of Medicaid is shared by the federal and state governments.

The Kaiser Foundation on Medicaid and the Uninsured has released an analysis of the potential effect of federal healthcare reform on the states' Medicaid populations. The report assumes two scenarios: One uses state participation rates assuming moderate levels of participation. The other other assumes enhanced participation by states. Virginia currently has extremely low coverage levels (48th in the United States). What was their conclusion?

The changes to the Medicaid program under the Patient Protection and Affordability Care Act (PPACA) significantly expand Medicaid coverage for adults. There will be large increases in coverage and federal funding in exchange for a small increase in state spending. States with low coverage levels and high uninsured rates will see the largest increases in coverage and federal funding. Higher levels of coverage will allow states to reduce payments they make to support uncompensated care costs.

(Uncompensated care usually refers to care given to people who have no insurance coverage and no way to pay for their care).

The study predicts "state spending could increase by $43 billion while federal spending could increase by $532 billion." This is because the federal government will contribute more for new enrollees than it currently does to present enrollees.

The study also predicts Virginia could see a 50% reduction in the number of uninsured adults at 133% of the federal poverty level or 245,000 more people covered under the "standard" scenario assumptions. The "enhanced" scenario predicts a 75% reduction in uninsured or 365,000 more people covered. Under federal poverty guidelines, a person with an income of $10,830 is considered to be "poor."

Our state presently ranks last in the United States in federal grants due to our limited programs to help low-income people and we ranked 49th in average per capital aid to state and local governments. If you have private insurance, you pay for the uninsured every day so the more people who have health insurance, the better off everyone is.

The bottom line: Given that the federal government will be picking up a large amount of the cost of this, Virginia should be looking very closely at enhancing our Medicaid coverage.

The executive summary is posted below if you would like to read it (it is not light reading material). The full report can be accessed here.

Medicaid Coverage and Spending in Health Reform: National and State-by-State Results for Adults at or Below...

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