November 23, 2012

The election is finally behind us, and the Affordable Care Act (ACA) won. It’s time for Virginia’s elected leaders — whether or not they supported the law — to take steps to fully implement it. This is not just about providing health care to more than 1 million uninsured Virginians; this is about Virginia’s economic interests.

The General Assembly faces two critical questions in 2013: Will Virginia operate its own health insurance exchange or rely on one administered through the federal government? And will it expand Medicaid eligibility to more of the poor? Those opponents of the ACA who hoped a Romney administration would repeal the law can no longer put off such key policy decisions. The serious discussion these questions demand requires all of us to set aside politics and partisanship for the good of the commonwealth.

First, the exchange. Starting in 2014, Virginians who earn between 138 percent and 400 percent of the federal poverty line and employers with up to 50 workers will be able to purchase health insurance via this system — about 500,000 individuals, employers and employees in all, according to the Urban Institute. The exchange will encourage reputable insurers to compete to provide greater consumer choice at lower cost.

The ACA gives discretion to the states regarding whether to operate their own exchange or take advantage of federal assistance. In 2010, to help determine which made sense for Virginia, Gov. Robert F. McDonnell (R) created the Virginia Health Reform Initiative Advisory Council (on which I serve) to make recommendations. The council unanimously endorsed Virginia operating its own exchange.

Unfortunately, McDonnell disregarded the recommendation, putting Virginia in the perilous position of having the federal government involved in an area that has traditionally been reserved for the states. If we do not take action to operate our own exchange, the federal government will do it for us. But the governor’s cool reception has so far resulted in inaction by the General Assembly.

The Medicaid decision has become particularly contentious, thanks to the Supreme Court decision making the expansion voluntary. Expanding Medicaid eligibility from 30 percent of the federal poverty level to 138 percent would cover more than 400,000 additional Virginians — 84,000 of them children. The good news is that the federal government will pay 100 percent of the costs starting in 2014 and gradually reduce that contribution to 90 percent starting in 2020. Virginia’s annual share of additional Medicaid spending would be about $200 million over the next 10 years.

The big question is, can we afford it? Yes, we can. Here’s how:

The federal and Virginia governments annually reimburse hospitals and clinics that treat a “disproportionate share” of uninsured and low-income patients — at a cost of about $190 million. These payments don’t come close to the actual cost, but the money is important for those hospitals to remain viable. Since many of these patients would qualify for Medicaid, any spending increase for Virginia as a result of Medicaid expansion would be offset by reduced uncompensated care.

Expanding Medicaid will also create tens of thousands of jobs in Virginia — good jobs, including physicians, physician assistants, nurses, nurse practitioners and lab technicians, etc. A University of Maryland study found that a fully implemented ACA would create 27,000 jobs in Maryland, reducing unemployment by 0.6 percent. Imagine the impact in a more populous state like Virginia. The “multiplier effect,” through income and sales taxes generated by these jobs, would offset more of the new spending and would be a net positive for Virginia’s economy.

When, after the election, McDonnell reiterated his opposition to the Medicaid expansion, he noted that there is no guarantee that the federal commitment to the Medicaid expansion will continue down the road. This is a commonly expressed concern, but it’s true even of the existing Medicaid program, of course, and it will forever be the case. And, remember, doing nothing will not make the problem of the uninsured go away. Uninsured and low-income Virginians will still get sick and require care; Virginia just won’t get reimbursed for 90 percent of the cost of this care. Walking away from these federal funds makes no sense — not for the patient, not for the hospital, not for taxpayers.

Virginia cannot afford to sit on the sidelines. We must put aside our partisan differences and do what’s in the best interests of our economy and our commonwealth. And we need Gov. McDonnell to lead the way.

The writer, a Democrat from Arlington, is a member of the Virginia House of Delegates.