KELLY: Endorse the expansion

Expanding the Medicaid program would offer Virginia many economic and social benefits

Undoubtedly, one of the biggest questions facing the state of Virginia today is whether it should choose to expand Medicaid coverage under the Affordable Care Act. Though Governor McAuliffe’s campaign concentrated on the expansion of Medicaid — arguably making his election a public mandate for such a move — the state has yet to act.

For the University, the Charlottesville community and the state, expanding Medicaid would have significant positive effects. The current political environment, however, seems to focus on purely partisan issues rather than substantive ones.

According to the Kaiser Commission on Medicaid and the Uninsured, an expansion of the Medicaid program under a full implementation of the Affordable Care Act would result in a 71.2 percent increase in Medicaid enrollment in the area encompassing Charlottesville, Harrisonburg and Winchester.

The impact on the uninsured would be similarly encouraging. In the same region, the estimated size of the uninsured population is currently 76,000. According to the same study, if Virginia were to expand Medicaid, this number would be cut in half. But if legislators continue to quarrel rather than acting, these effects will go unrealized.

With increasing amounts of research such as this in the public domain, the current intransigence of Republican House members seems rather irrational. Absurdly, Republicans represent 32 out of the 50 districts with the highest percentage of Medicaid recipients yet refuse to approve a program that would provide aid to the neediest of their constituents.

Considering for a moment that our Republican delegates may be well aware of this information, their cognitive dissonance may stem from what is now a longstanding commitment to refuse to cooperate whatsoever on the ACA. With elections on the horizon and primary contests just around the corner, this pact is at least somewhat understandable, but makes it no less indecent to those in need of immediate aid.

Republican delegates have instead proposed to separate the Medicaid expansion from the rest of the state budget. It is difficult to see this gesture as anything but purely political in nature. After all, Medicaid makes up more than 20 percent of state expenditures — to separate such a large portion of the budget from negotiations and leave it untouched is arbitrary and will serve to complicate budget talks on the local level throughout the state. These delegates have also expressed skepticism that the federal funding for the program will not come through in the future. It is important to remember, however, that Virginians will have to pay for Medicaid expansion even if the expansion is not approved; in fact, they already do. Since the program is federally funded, a refusal to expand it here would mean that the state would lose roughly $5 million per day in federal tax dollars that will be subsidizing the 25 states that have already approved the expansion.

On that note, the potential effects on the state’s budget that would result from an expansion of Medicaid are of particular concern to the University community. At face value, the Medicaid expansion seems to be a generous financial deal for the state. This comes from a key provision of the ACA which mandates the federal government pick up the tab for the expanded coverage. The ACA’s policy initiatives allow for the states to transfer several of their Medicaid health insurance initiatives to the federal government, which adopts the programs and incurs significant costs for the expanded coverage. If Virginia were to adopt the Medicaid expansion, the federal government would cover nearly all of the expansion costs for the initial 10-year period of the law. This transfer process would result in appreciable budget gains and liberate considerable amounts of money for other budget items.

Moreover, study after study has found that federal Medicaid dollars spur economic activity beyond the initial investment. In tough budget times, federal spending on healthcare can free up state dollars for other spending; with a public education sector pained by reduced state funding, Virginia would stand to benefit greatly from this newfound budget freedom. On balance, the Medicaid expansion could actually save money for the state.

An article from last year’s American Economic Journal on Economic Policy, which examined the effects of Medicaid expansion, found not only that such a move would result in significant employment gains but also that 84 percent of those gains would occur outside of the healthcare and government sector. In health and education in particular, the expansion would have a direct effect on hiring. Both the University and the city of Charlottesville, communities that depend upon the success of these two sectors, certainly have much to gain as a result. Unless the consistent findings of various studies on the Medicaid expansion lack any merit whatsoever, it is readily apparent that we would stand to benefit from the expansion.

On the local level, many uninsured individuals in Charlottesville will receive coverage under the Medicaid expansion. For a city struggling to find solutions to persistent issues such as homelessness, providing expanded Medicaid coverage could substantially lessen the financial burdens that many poor people in the community carry and create a healthier city.

Conor Kelly is an Opinion Columnist for The Cavalier Daily. His columns run Tuesdays.
Published March 25, 2014 in Opinion

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