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December 20, 2013

Moving Backwards


The overall outlook for Medicaid expansion in Virginia went negative this week, with just 11 days before hundreds of thousands of Virginians begin falling into the health insurance coverage gap.

Governor McDonnell started the week off on the wrong foot by setting in motion a plan to end Medicaid expansion before it even starts.

In his budget proposal, the governor inserted a poorly crafted provision to automatically end Medicaid expansion on June 30, 2016, unless reapproved by the legislature. While a review of the costs and savings of expansion is certainly a fine policy to put in place, cutting the program off after two years – or even less since it hasn’t been started yet – wouldn’t give the state enough time to get the program up and running at full speed.

Plus, ending it half-way through 2016 would hurt the state’s bottom line. That’s because the federal government will pay for all of the costs of expanding coverage from 2014 all the way through 2016. So, just like delaying expansion beyond January 1, 2014 is going to cost the state money – about $5 million a day – ending the program before December 31, 2016 leaves federal money on the table that the state could instead use to pay for a wide array of health care services currently covered by state dollars.

The governor’s plan also distracts the Medicaid Innovation and Reform Commission (MIRC) from its original charge of overseeing a specific set of reforms and voting on whether to expand Medicaid. McDonnell would now like the MIRC to evaluate all programs related to health and health care in Virginia, including many that have nothing to do with Medicaid. And he seems to call for the MIRC to evaluate fraud and abuse in all public programs. Every single one.

But the MIRC doesn’t need the governor to introduce mission creep; they do enough of that on their own. On Tuesday, the MIRC met for nearly three hours to discuss Medicaid expansion in Iowa; how the Affordable Care Act is funded; where fraud is being investigated in the health care industry; and what work requirements are in place in programs completely unrelated to Medicaid. While informative, these presentations distracted from the MIRC’s actual responsibilities.

At the very end of the meeting, Secretary Bill Hazel was given only a few minutes to hastily review the significant progress made by Virginia’s Medicaid office on the reforms that the MIRC is charged to oversee. The MIRC concluded the meeting without any serious discussion of whether to expand Medicaid.

Looking forward, it’s clear that the critical decision to help 400,000 Virginians, save the state money, and boost the economy through Medicaid expansion now rests with incoming Governor Terry McAuliffe and the 2014 General Assembly.

–Massey Whorley, Senior Policy Analyst

The Commonwealth Institute

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