Health care reform may be flawed but “we have to do something
Written by A.J. Plunkett
Expanding Medicaid to more Virginians as outlined in the Affordable Care Act would be hard.
It would cost a lot of money—perhaps
millions to implement, and between $1.5 billion and $2.2 billion from state coffers over the next decade to fund. The federal government will spend billions more.
The expansion would mean streamlining the application process, which will require information technology systems in local, state and federal offices to be able to communicate with each other—and it would help if the people in those offices talked with each other as well.
But, local health care financial executives agree, it needs to be done because the rising cost of covering health care for those who can’t afford insurance is going to cost even more, and that will be hard on everyone.
“It’s gotten to a tipping point,” says Melinda Hancock, chief financial officer for Bon Secours Virginia. “The number of uninsured in the health care system is unacceptable. We have to do something about that.”
In 2011, Virginia hospitals and health systems had to cover $1.2 billion in uncompensated care—including $515 million in charity care, $318 million in costs Medicaid did not cover, and $412 million in bad debt— expenses patients promised to pay but didn’t, according to the Virginia Hospital and Healthcare Association.
No hospital or health system can handle those kinds of losses, administrators say, so the cost of uncompensated care gets passed on through higher costs in general.
Virginia’s Medicaid office, which has some of the strictest eligibility requirements in the nation, covers 1.06 million Virginians—72 percent of them children, or the parents or caregivers for children and pregnant women. The rest are elderly or have a disability. No adults under the age of 65 are covered based on low income alone.
Under the ACA’s expansion of Medicaid eligibility, more than 400,000 Virginians could qualify, according to the Virginia Health Reform Initiative, which was set up by the state to study the potential impact of reforms and how to implement them.
“Medicaid expansion is a good thing, because it’s providing insurance for more people,” says Megan Padden, vice president of Optima Health, the insurance arm of Sentara Healthcare.
Getting more people onto Medicaid or signing them up for affordable insurance through health insurance exchanges can only help cut down on uncompensated care costs, say Padden, Hancock and others.
Dealing with uncompensated care has been a long-standing issue in the health care system, said Bill Downey, president and CEO of Riverside Health System, in a statement earlier this summer.
“While we do not know the direction that the Supreme Court will take and how it will impact this issue, we believe there are solutions such as expanding the Medicaid program and growing Medicaid managed care for the uninsured,” Downey said in his statement just before the
Supreme Court ruling.
The direction the Supreme Court took was to uphold the ACA as a whole, including the mandate that individuals must buy health insurance or pay a penalty, but prohibited the federal government from withdrawing federal funds if a state chose not to expand its Medicaid eligibility as set out in the health reform law.
Several states, including Virginia, are weighing and waiting. They are weighing whether the costs of expansion—both in effort and funding—are too onerous on state and federal budgets, and waiting for a lot of details about the expansion to be determined by the Obama administration to fully weigh the costs.
The concern of Hancock and others is that without expansion, many of the 400,000 uninsured Virginians whose incomes are so low they could qualify for expanded Medicaid will make too much money to qualify for subsidies to help pay for insurance through health exchanges.
And that leaves things as they are now—with thousands unable to afford insurance, and health providers with high uncompensated care costs.
The Commonwealth Institute for Fiscal Analysis says Medicaid expansion is a good deal considering that the federal government would pay for 100 percent of new beneficiaries for the first three years and states would pay no more than 10 percent from 2020 forward. Currently, the federal government picks between half and two-thirds of Virginia’s Medicaid funding.
But in an op-ed article published in the Washington Times in August, Virginia Gov. Bob McDonnell says that health reform couldn’t happen if either the states or federal government can’t sustain the funding.
He and other state governors have said they want to see who wins the elections in November before deciding how to proceed with Medicaid.
“At the end of the day, it’s not perfect,” Bon Secours’ Hancock said of the ACA. But providing for the uninsured and dealing with uncompensated care must be dealt with somehow.
“The problem is not going to go away, regardless of what happens in the election.”
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Since Congress first created the Medicaid program in 1965, it has changed the law several times to expand eligibility to more and more citizens. Each state runs its Medicaid program differently, and as such receives different levels of federal funds. The eligibility criteria set by some states are stricter than others. Virginia’s is among the strictest.