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Sunday, October 20, 2013
Virginia’s Medicaid program isn’t the broken, out-of-control system that its opponents portray. Far from it.
The public insurance program for low-income people provides a wide range of Virginians with needed health care, improves their overall well-being, holds down medical costs and protects families from financial ruin because of serious illness or injury.
With all of that going for it, Virginia lawmakers should accept the federal money already set aside to get more people covered.
While the amount that the state spends on Medicaid has grown over time, that is largely due to the steady rise of health care costs nationwide. Medicaid, just like all other insurers, is a purchaser of health care, so its costs are tied to the cost of visits to the doctor, medical procedures, prescription drugs, diagnostic equipment, and other goods and services. When those costs go up, as they have since 1990 at a rate of about 5 percent per year, Medicaid costs go up, too.
But the state has worked to limit that growth by having an efficient system that spends half as much as private plans on administrative costs. As a result, the average cost per Medicaid recipient has increased just 3.5 percent per year by comparison.
Expanding Medicaid can work to lower costs in other ways. Gaining health coverage means that people can get the routine care they need before an inexpensive condition becomes a costly emergency or chronic illness. Compared to people without insurance, people with Medicaid have greater access to preventive screenings for diseases like cancer and diabetes and much-needed prescription drugs.
This kind of access to health care can have significant long-term benefits. Medicaid recipients are 25 percent more likely to report that their health is “good” or “excellent.” In addition, in three states that made more people eligible for Medicaid between 2000 and 2005 (New York, Maine and Arizona), overall death rates declined compared to neighboring states that didn’t significantly expand eligibility, according to a study in the New England Journal of Medicine. The decline was significant: 6.1 percent among the entire adult population in the states that expanded eligibility.
Medicaid also offers families financial security. It protects people from catastrophic medical debt, which is the leading cause of personal bankruptcy. More than 50,000 Virginians go bankrupt each year because of unpaid medical bills. But people with insurance through Medicaid are 50 percent less likely to borrow money or fail to pay other bills because of medical debt than people without insurance. They are also less likely to have an unpaid medical bill, which is good news for health care providers as well.
As for the argument that the federal government might not hold up its end of the bargain to pay for Medicaid expansion — all of it for the next three years and no less than 90 percent after that — the Virginia legislature has addressed this concern. In the 2013 session, it took the smart step to authorize an automatic end to the expansion if the federal commitment is reduced at any point. Lawmakers also set up a special fund to capture the estimated $1.64 billion in state budget savings from expansion to help pay for future costs. These savings will build up as the state begins to use federal Medicaid dollars to pay for things currently covered by state funds, like care for the poor, mental health and substance abuse services, and hospital care for prisoners.
Another refrain opponents use is that one in four doctors nationally isn’t accepting new Medicaid patients. But the vast majority of doctors — 76 percent — are. That’s not far from the 82 percent of physicians who report accepting new patients with private insurance. Plus, the Affordable Care Act gave doctors a strong incentive to accept new Medicaid patients: It increased their payments for treating those patients for 2013 and 2014.
Despite the rhetoric of those opposed to expansion, the fact is Medicaid is an efficient insurance program that connects people with the health care they need to stay healthy and productive.
Medicaid is far from broken. And lawmakers should expand it to get more hard-working Virginians the help they need.
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