As most of us know, the Supreme Court did not strike down the Affordable Care Act (Obama Care or ACA). The Court decision did allow for each individual state to determine whether or not it would voluntarily expand its Medicaid program under the ACA. And really that makes sense because Medicaid is a state run program.
The rest of the ACA is now the law of the land and the revenue piece of this act is particularly pertinent to our discussion of whether we should provide coverage to the population that will be left in what is being called the “coverage gap.”
Under the provisions of the ACA there are a series of new taxes and fees that provide most of the revenue to support the program’s features. Most of these are already in place and are providing new revenue to the federal government estimated to be about $2.5 billion per year from Virginia. The largest of these new taxes falls on our more affluent citizens, with household incomes above $250,000 per year. The rest of the revenue to support the program is coming from changes that were made to Medicare. Medicare services are not being reduced to those that qualify, but the payments that healthcare providers receive from the Medicare program as “payment in full” has been reduced.
This, coupled with increased efforts at the federal level to combat waste and fraud, will produce significant savings that are supposed to be available to help with the cost features of the ACA. The direct shortfall of this one initiative will reduce payments to hospitals in Virginia by estimates of $300 to $400 million per year. The intended trade-off is, of course, that more of the people currently showing up at hospitals without insurance, are supposed to be covered under expanded Medicaid. Additionally, there are federal funds available to offset a portion of this uncompensated care. This is scheduled to go away as well.
The bottom line is that Virginia taxpayers and care providers are providing about $2.9 billion per year to support better access to health care for Virginians. If we do not act, that money will not be returned to Virginia and our healthcare system will be financially challenged to perform its mission, and our citizens in need of access will continue to be shortchanged.
It is my opinion that we should use this as an opportunity here in Virginia to work on policy aimed at making our Medicaid program more cost effective and more efficient at providing services to those in need. I am a strong supporter of reforming not only our Medicaid program, but also attempting to comprehensively address and reform our total healthcare system in the Commonwealth.
Doing nothing is not an option! Out of control healthcare costs are bankrupting our families and denying our less affluent citizens the full range of benefits that Mr. Jefferson referred to as, “Life, Liberty, and the Pursuit of Happiness”
The Honorable Emmett Hanger, Jr.
The author is Chairman of the Medicaid Innovation and Reform Commission and Senator from the 24th Senate District in the Shenandoah Valley
Any comments or suggestions may be sent to him at firstname.lastname@example.org