Weekly Column: Five Myths About Medicaid Expansion

The following is my column that will appear in the Mt. Vernon Gazette and The Mt. Vernon Voice in the week of June 4, 2014.

Five Myths About Medicaid Expansion

As the deadline to pass a budget approaches, Virginians will likely hear that state government could shut down because of a stalemate over expanding Virginia’s Medicaid program as encouraged by the Affordable Care Act.  I would like to clear up a few misconceptions. 

Myth #1 – Virginia’s Medicaid Stalemate Is a Partisan Dispute

               There have been media reports that the Medicaid expansion fight is a Democrat-versus-Republican battle.  It is not.

            Three Republican state senators have proposed a compromise to use private insurance to expand Medicaid, similar to Republican proposals in Arkansas and Indiana.  All but one of Virginia’s 52 Democratic legislators have indicated they would accept this, but the Republican leadership of the House of Delegates has refused to accept this compromise.  

                Medicaid expansion has been accepted or proposed by the Republican governors and legislatures of Arizona, Ohio, Michigan, Nevada, New Jersey, New Mexico, Indiana, Pennsylvania and Utah and it is not a partisan issue.  Similar to the federal government shutdown last fall, Virginia’s budget is stalled because the conservative wing of the Republican party is battling moderate Republicans and Democrats.  

Myth #2 – Medicaid Expansion Costs State Taxpayer Money

The federal government will pay 100% of the cost of Medicaid expansion in the first few years phased down to 90% in the out years.  This means about $5 million per day from the federal Government and over $750 million lost through today by failing to act. 

Multiple experts project Medicaid expansion will save Virginia taxpayers about $200 million per biennium because the federal government will pay 90-100% of the cost of prison healthcare, charity healthcare at university hospitals (e.g. the University of Virginia and the Medical College of Virginia), community service board programs (mental health), free clinics and other Virginia-taxpayer funded programs. 

               Medicaid expansion will also create 30,000 new jobs which generates additional tax revenues for the state as those workers earn and spend money. 

  Myth #3 –Virginia’s Medicaid System Is Rife with Fraud

Virginia’s Medicaid Fraud unit (MFCU) recovered a little over $11 million of roughly $8 billion spent by the state last biennium.  This means that fraud in Virginia's existing Medicaid program is less than two-tenths of one percent (.2%).  While the MFCU has taken the lead on several national fraud cases such as national drug settlements, that does not equate to widespread fraud in Virginia’s system.     

Myth #4 – Medicaid Expansion Can Be Resolved Outside the Budget Process

In the five years I have served, major Virginia Medicaid reforms have been legislated in the state budget instead of separate legislation.  For example, Medicaid managed care, which is a system under which private health care plan covers and manages patient care, was authorized in the 2011 budget.   In 2013, we created the Medicaid Innovation and Reform Commission (MIRC) to approve changes and expand Medicaid.    

Medicaid expansion must be included in the budget because it would free up about $200 million of taxpayer dollars - funds that must be reappropriated to schools and public safety now, not in twelve months.    

Also, aside from precedent, the House Republican leadership has shown no support for expanding Medicaid.  Separating expansion from the budget is like starting a negotiation after the contract has been signed.  

Myth #5 – The Federal Government Can "Bait and Switch"

Several legislators have state that once Virginia commits, the federal government could reduce its share from 90% to 50%, leave Virginia taxpayers "holding the bag" and locked into to a more expensive program.  This is misleading.    

The federal government sent Governor McAuliffe a letter stating that Virginia is free to withdraw from a Medicaid expansion at any time. Second, the Supreme Court of United States specifically held that requiring states to expand their Medicaid programs is unconstitutionally coercive.  Some people apparently cannot accept the U.S. Supreme Court as sufficient authority. 

            In previous columns and on my blog at scottsurovell.blogspot.com I have written about the importance of Medicaid to people's health, health care facilities, long-term care and our society in general.  Medicaid is an important health insurance program for many reasons and it would be a tragedy for our state to leave this gaping hole in our health care system.

It is an honor to serve as your state delegate.  Feel free to email me at scottsurovell@gmail.com  at any time.