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October 21, 2014

Willful Ignorance

Members of the House Appropriations Committee are ignoring one simple fix – closing the health coverage gap – to a new wrinkle in the state’s financial woes.

At a committee meeting yesterday, lawmakers learned that the Department of Corrections (DOC) needs an additional $45 million to cover inmate health care costs this year and next. The shortfall stems from a combination of switching the state’s private inmate health care contractor, treating Hepatitis C, and rising costs for health care that inmates get at outside hospitals and doctors’ offices.

There’s an easy way to fix much of that problem: Using available federal funds to cover inmates’ inpatient hospital costs could save the state more than $30 million a year and upwards of $235 million over the next eight years. All lawmakers have to do is end their stubborn refusal to close the coverage gap. Medicaid would then cover inmates’ inpatient hospital care.

Despite all of the budget troubles the state has faced in the last six months, and this emerging problem with DOC, closing the coverage gap was conspicuously absent from the DOC presentation and follow-up by the committee, which is controlled by opponents of closing the coverage gap. But after the meeting, DOC Director Harold Clarke told Richmond Times Dispatch reporter Michael Martz, “It stands to reason that the cost is going to be lower if you’re going to expand” Medicaid.

And there’s more savings to be had beyond that from closing the coverage gap – about $160 million a year. That’s because allowing low-income Virginians to have access to affordable health coverage would greatly reduce the need for state-funded care for the poor at the University of Virginia and Virginia Commonwealth University hospitals, local mental health and substance abuse services, and other programs that serve vulnerable populations.

The savings from closing the coverage gap could help DOC and the rest of the state deal with the shortfalls that have already resulted in reduced services and layoffs. But from the looks of it, most members of the House Appropriations Committee would rather hear what they want to hear, and disregard the rest.

–Massey Whorley, Senior Policy Analyst

The Commonwealth Institute

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