On the Money

As House lawmakers continue to resist closing a yawning health coverage gap in Virginia, evidence is mounting that the cost concerns they cite are unjustified.

New data coming in confirms that it would be cheaper to expand Medicaid than many thought.

That’s because the people gaining coverage are healthier – and therefore cheaper to insure – than current, non-disabled Medicaid enrollees. They are less likely to suffer from a number of chronic physical conditions, and they show fewer signs of mental illness. That is true even though they are actually older on average than current enrollees.

Back in January, the state’s Medicaid office took its own look at what expanding Medicaid was costing other states. It found that closing the coverage gap would cost significantly less over the next eight years than had been previously estimated. This, combined with higher-than-expected savings from reduced indigent care costs, meant that Virginia would be able to save $600 million and cover 400,000 uninsured Virginians at the same time.   

Many lawmakers have doubted those numbers, but the real-world experience shows that the Medicaid office was on the right track. So when the state assumes a small share of the cost of providing this coverage after 2016, it will be much less than previously expected.

But just because the new Medicaid enrollees are in better health doesn’t mean closing the coverage gap in Virginia is any less pressing. Many of the newly eligible do need help managing chronic conditions. Even more would greatly benefit from routine checkups and preventive care, before conditions become chronic and disabling – and more costly.

These latest findings add to a growing body of evidence that expanding Medicaid costs less than some feared – and that opponents of expansion are running out of excuses.   

–Mitchell Cole, Research Assistant