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Wednesday, June 19, 2013
There’s no such thing as a free lunch — and unless Virginians speak out now, they’re about to get a huge bill for a “meal” that won’t satisfy the commonwealth’s hunger for health care among its low-income residents.
This week, Gov. Bob McDonnell’s very own “super committee,” the Medicaid Innovation and Reform Commission, held its first meeting to discuss expanding the joint federal-state program for the poor in Virginia, to include more participants.
Overwhelmingly, taxpayers across the country have demanded that lawmakers opt out of this key component of the president’s so-called Affordable Care Act. Now, that sentiment is boiling over in Virginia. But why is this state-by-state battle spreading when the federal government’s stated goal sounds so noble?
For one, citizens are catching on to the fact they are being played by a fiscal shell game. Based on Virginia’s participation alone, federal spending could increase by $4.1 billion over the next 10 years, according to a report from the Kaiser Commission on Medicaid and the Uninsured. If every state were to expand Medicaid, federal spending would balloon by $800 billion over this same period.
That money isn’t free — those are tax dollars that tens of millions of Americans, including Virginians, send to Washington. By demanding that lawmakers reject Medicaid expansion, taxpayers have an opportunity to rein in the reckless borrowing binge in our nation’s capital.
Additionally, Virginia’s budgets would feel the strain of the expansion. The health law states that the federal government will pick up the entire tab for Medicaid expansion for the first three years and 90 percent of the cost in the long term. Here’s the problem: That still leaves Virginia with a $284 million tab over the next decade. This assumes the federal government will not renege on its 90 percent funding commitment, and signs already point to this being a dangerously shaky assumption. President Obama has already proposed a reduction in federal match rates starting in 2017. If major tax increases are to be avoided at the state level in the near future, Medicaid should be reformed to achieve cost savings, not enlarged.
Perhaps even worse, despite the high cost of Medicaid, its beneficiaries aren’t any healthier than the uninsured. A groundbreaking new study of Oregon’s Medicaid program compared a group of new enrollees with a similar set of individuals who were not allowed into the program. This provided researchers an extremely rare opportunity to evaluate Medicaid participants with a statistically representative “control group.”
According to the researchers, “This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.” That’s an underwhelming assessment for a program that cost states and the federal government $408 billion in 2011.
Avik Roy of the Manhattan Institute put it best in a recent Forbes article when he wrote, “If Medicaid were a new medicine applying for approval from the Food and Drug Administration, it would be summarily rejected.”
Additionally, the Medicaid program is plagued by fraud and waste, which adds costs to those outlined previously, and is certain to be exacerbated by adding hundreds of thousands to Virginia’s Medicaid rolls. The Centers for Medicare & Medicaid Services found that Medicaid’s improper payment rate in 2011 was 8.1 percent, amounting to $21.9 billion — the second-highest of any federal program reporting such data.
Expanding Medicaid would make Virginia a co-owner of the federal government’s dramatically more intrusive role in the health care system and amount to fiscal malpractice. Let’s hope our officials in Richmond will come to their senses, and prescribe lower-cost alternatives that serve taxpayers, patients and providers better.
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