The Right Note: Make Medicaid Expansion a Separate Issue

The Right Note is a weekly opinion column published on Thursdays. The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

Last fall, as the fiscal year closed in Washington, Republicans in Congress asked President Obama to consider repealing or delaying, part or all of, the Affordable Care Act. President Obama refused to negotiate on the issue. The result of the impasse was a 17-day partial government shutdown.

Republicans, arguing the president’s signature legislative initiative might not be ready for prime time, were panned for holding the federal budget hostage over Obamacare. As it turns out, the initial sign-up phase was a mess. Since then, the Obama Administration has announced several additional delays for employers and individuals necessitated by unfortunate realities of the law.

Now, Democrats in Richmond, lead by Governor Terry McAuliffe, are threatening not to agree to a state budget unless Republicans relent and agree to expand the Medicaid provisions of Obamacare into Virginia. This a reversal of the Democrat’s previous talking point that holding up a spending bill over legislation relating to Obamacare is unacceptable.

Expanding Medicaid would bring more borrowed federal dollars into Virginia initially, but those 90-100 percent federal subsidies will not last indefinitely. As Congress faces long-term budget realities and inevitably must lower the subsidies below 90 percent, Medicaid expansion would begin to crowd out other state budget priorities like education, transportation and public safety at an even faster pace than it is currently.

Currently, Medicaid costs almost $9 billion a year and consumes about 22 percent of our general fund budget in Virginia. It is the fastest-growing part of our budget, growing at an average of eight percent annually.

Moreover, it may not just be the subsidies themselves that drive up the costs of providing health care through Medicaid in Virginia. According to some, around one-third of doctors are already unwilling to accept Medicaid patients due to reimbursement rates that are substantially lower than private-sector health care coverage. Flooding an additional 400,000 Virginians into the existing pool of doctors will drive the percentage who can see a primary care physician down even further. This will leave many Medicaid patients with no option but to use emergency rooms for acute needs.

A Harvard study that looked at outcomes of a 2008 expansion of Medicaid in Oregon confirmed that it dramatically increased emergency room use — driving people into the highest-cost health care option. This finding goes against the promise of the Affordable Care Act that expanding Medicaid would help bend the health care cost curve down.

Low Medicaid reimbursement rates coupled with increased use of both emergency rooms and doctor visits will also shift even more costs for providing health care to private sector health plans. This will force more middle class Virginians to make more tough choices in their family budgets as premiums rise in the coming years.

All told, there are simply too many unanswered questions surrounding Medicaid expansion in Virginia to demand it be included in this budget. Governor McAuliffe and Democrats in Richmond should accept the budget that has been agreed to, and then take Republicans up on their offer to hold a special session to fully debate Medicaid expansion.

Mark Kelly is a former Arlington GOP Chairman and two-time Republican candidate for Arlington County Board.