Name the issue before the Virginia General Assembly that you think will have the greatest impact on the bottom line of businesses this year? Here’s a hint. It’s not taxes, transportation or overregulation.
These 195,000 have fallen into the “coverage gap” that was created as a consequence of the Supreme Court’s 2012 ruling that states could opt out of the Affordable Care Act’s Medicaid expansion. The gap takes in those Virginians who don’t get health insurance from their employers (yes, 70 percent of them have full- or part-time jobs) and aren’t eligible for either traditional Medicaid under the commonwealth’s strict eligibility limits or subsidized insurance on the state’s federally operated health-care exchange.
Though they do not have health coverage, however, uninsured Virginians still seek medical treatment when they are ill or injured. Those in the coverage gap often cannot pay the bill afterward. So Virginia’s hospitals — which, by law, must provide treatment whether the patient has the means to pay or not — provide about $600 million in uncompensated care to uninsured Virginians each year.
This is where businesses are affected. To offset some of that cost, health insurance plans are charged more for tests and treatments in the hospital setting. Insurers pass those costs on to businesses and individuals that purchase health insurance, in the form of higher premiums. In fact, according to a Senate Finance Committee analysis, as much as 10 percent of health-insurance premiums are because of this cost-shifting. That means the cost of providing care to Virginians who fall in the coverage gap will seriously affect the bottom line of Northern Virginia businesses.
The General Assembly can take steps to reduce this cost-shifting and help businesses rein in their coverage costs, but some legislators have so far refused to act. The commonwealth can recapture a substantial portion of the federal taxes and fees that Virginians are paying as part of the Affordable Care Act to help cover the costs of providing health care to those in the coverage gap. Washington has committed to paying 100 percent of the cost through 2016, phasing down to 90 percent in 2020 and beyond.
Gov. Terry McAuliffe (D) proposes using this money to expand traditional government-run Medicaid. This is strongly opposed by many in the General Assembly who believe the costly program needs significant reforms and are skeptical that the federal government will meet its obligations long term.
Others, led by state Sen. John C. Watkins (R-Powhatan), propose a more market-based solution. The Fairfax Chamber of Commerce supports this approach as the best way to resolve this issue and protect businesses from unfair cost-shifting.
Under this solution, Virginia would use the federal funds to provide basic coverage from competing private insurers to those in the coverage gap. Participants would pay income-based co-pays and meet minimum work requirements. Participants would also be informed that this coverage, like any insurance policy, would remain in force only as long as premiums are paid — which means that if the federal government reneged on its funding commitment in future years, the policies would be subject to cancellation.
This solution would ensure that those in the coverage gap would receive cost-efficient health insurance. It would recapture Virginia tax dollars that would otherwise stay in Washington. It would avoid a massive expansion of bureaucracy while ensuring that Virginia taxpayers are not left on the hook, should Washington not meet its commitments.
Most important for many Northern Virginia businesses, this solution would reduce upward pressure on health-insurance costs. This would help businesses better manage their health-care costs and reduce the impact on their bottom lines — which is why providing health insurance to uninsured Virginians is a top priority for business. The solution is there. It is time for the General Assembly to act.
The writer is president and chief executive of the Fairfax County Chamber of Commerce.