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October 10, 2013

Just Enough Information To Be Wrong

Bart Hinkle’s op-ed taking issue with our report Medicaid Expansion Will Pay for Itself missed the mark on a lot of things, but two really stood out –  his skepticism about how much the state would save on medical costs  and the doubts he raises about whether new health care jobs will be good for the state’s economy.

In our report, we use cautious, official state forecasts of how much the state would save if it no longer had to cover the cost of health care for thousands of Virginians without health insurance. We estimate that using the federal funds being offered to insure more low-income Virginians would save the state $637 million over nine years in uncompensated care payments, since it would no longer have to use as much of its own money to reimburse hospitals for the cost of caring for so many people without insurance.

Hinkle claims that our analysis is “overly optimistic” because hospitals in Massachusetts, which instituted similar health care reforms several years ago, successfully lobbied for continued payments by that state. But our analysis recognizes that Virginia would continue paying hospitals for treating the indigent, including undocumented immigrants who aren’t eligible for Medicaid and other people who choose not to get coverage. In fact, the $637 million in savings represents just a fraction of the approximately $2 billion over nine years that the state would spend. Hardly optimistic. 

Hinkle also questions the value of the nearly 30,000 health care jobs that Medicaid expansion would support in Virginia, wondering if “allocating the jobs elsewhere might be more economically beneficial.” That’s simply not how it works.  Virginia cannot take the money for Medicaid expansion and use it for something else, like building roads or bridges. The opportunity we have is to create jobs in a growing field – health care – with an average salary of over $49,000 a year in Virginia.

Those workers will participate in the state’s economy, supporting jobs in other industries and generating tax revenue.

The  savings to be gained from Medicaid expansion are real, as are the economic benefits. Virginia policymakers just have to make the right decision and accept the great deal the commonwealth is being offered.

–Massey Whorley, Senior Policy Analyst  

The Commonwealth Institute

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