THE BLOG
08/21/2013 03:23 pm ET Updated Oct 21, 2013

Medicaid Expansion: The Wrong Prescription for Virginia

It is decision time for Virginia on Medicaid expansion. As Virginia's Medicaid Innovation and Reform Commission (MIRC) takes up the issue, they must remember that MIRC's purpose is to "review, recommend and approve innovation and reform proposals" for Medicaid in the Commonwealth, not simply to adopt a failing government program. MIRC's goal should be to help low-income residents receive better health care at a lower cost to Virginia taxpayers. Expanding Medicaid under the Affordable Care Act (ACA) fails both low-income residents and Virginia's taxpayers.

A State Budget Solutions report examines the health outcomes and costs to Virginia. The report shows how Medicaid expansion is the wrong prescription for Virginians.

The answer on Medicaid is fairly simple; the program does little to improve health outcomes. A New England Journal of Medicine study showed that in Oregon, where a lottery system was used to expand Medicaid coverage, recipients on Medicaid fared no better than those eligible state residents who did not receive coverage. A University of Virginia study found the in-hospital mortality rate for surgical patients on Medicaid was 13 percent higher than those patients without insurance.

The MIRC should not confuse health insurance with health care. An insurance card does not guarantee a healthy life.

Medicaid expansion does not fix the problem of rising costs, despite the pile of money being offered to Virginia by the federal government. Medicaid spending takes up 21 percent of Virginia's general fund budget, with costs growing at an average rate of over 9 percent per year. The state and federal government split the overall costs, so the allure of dollars from the feds entices General Assembly members. SBS seeks to remind states that, extra money will mean nothing if costs continue to grow.

Newly eligible Medicaid recipients will be covered by the federal government only for the first three years. That number drops by ten percent in six years. Based on past results in other states, that 10 percent will be much more than expected.

The predicted cost savings of making more residents eligible for Medicaid did not materialize when Arizona received a federal waiver to expand Medicaid, in eight years; the predicted savings skyrocketed into outrageous costs. Spending on the expansion quadrupled to $8.4 billion.

Researchers from Boston University and Harvard Medical School found that Medicaid expansion will add more people to government insurance, but not significantly lower the number of uninsured individuals because people currently with insurance will shift to Medicaid. The Thomas Jefferson Institute for Public Policy in Springfield surveyed Virginia residents enrolled in Medicaid. Nearly half of residents surveyed said that six months prior to enrolling they had private insurance, either through their employer or personal purchase.

Rather than expand a faltering Medicaid program, the MIRC should explore alternative solutions found in other states.

In Rhode Island, the state's federal waiver for Medicaid capped the overall spending permitted by the federal government in exchange for a large block grant. In only a few years, the cost growth rate slowed to three percent a year. Compare that with Virginia's rate of 9.2 percent.

In Florida, Medicaid Cure, a pilot program, has been so successful in test counties it is now being adopted statewide. Medicaid Cure allows residents to choose from several health plans that can be customized. The program controls costs and opens more doors for medical care for low-income residents.

Medicaid has fallen short of its promise. Virginia's leaders should not expand a failing government program just because money is being offered, and instead innovate and deliver better, more effective care to the Commonwealth.