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This week it
seems that every time you pick up a newspaper there is a story with
regard to healthcare and how Virginia will respond on that topic.
Another subject I saw and can most certainly guarantee that you saw in
print, or on a mobile app, everyday last week was Medicaid expansion.
Of the
people who visit, call, or write me - constituents, lobbyists, political
activists, or citizen groups-rarely is anyone neutral on Medicaid
expansion. They either love it or they hate it.
What we
can all agree on, however, is that there is a problem that needs a
commonsense solution -- for the one in eight Virginians who are
uninsured, including 37,000 veterans and their families, and for
taxpayers, who are already paying for this program through their payroll
deductions, to receive some return on their contributions.
The
primary argument against a new healthcare plan is that the federal
government cannot be counted on to hold up its part of a very good
bargain for Virginia, full federal funding of the costs for the next
three years and no less than 90 percent after that.
If that
were true, then why would we accept any federal funding because someday
Congress may reduce or eliminate that funding? Would we need to
radically rethink our budget planning process for a number of programs,
systems and projects?
It
might surprise you to know that more than 21 percent of Virginia's
revenue comes from the federal government, according to reports from the
Commonwealth Institute for Fiscal Analysis. For instance, Virginia's
investments in education depend on federal dollars. In 2015, the
Commonwealth is banking on more than $900 million, the vast majority of
which will go directly to our schools.
We rely
on more than $140 million in federal funds to support public safety
across the Commonwealth. That's money for the state police, our courts,
and the Virginia National Guard.
We also
make heavy use of federal funding for our transportation system. In
the last fiscal year, Virginia received almost $1.1 billion - that's
billion with a "B" - most of which will be used for highway maintenance
and construction. And that is in addition to the funding that will be
raised thanks to the transportation plan that passed in last year's
session.
So ....
if we were to assume that all federal monies were subject to
cancellation and therefore not to be solicited or accepted, you can
imagine the havoc it would play with our education, public safety,
transportation, courts, environmental and other portions of our budget.
The
question then becomes, when is it effective and beneficial to accept
federal funding and when is it an unacceptable option? I don't think
anyone reading this message would think we should do without funding for
police officers, our courts, our roads, and especially our schools.
Then why would we not accept federal funds to ensure the provision of
adequate healthcare to all Virginians?
Healthcare
is extraordinarily important to all of us, and to future generations.
We need to come up with a solution, but we must strive to get it
right.
As a
part of the Medicaid Innovation and Reform Commission I learned that
over the last decade the Commonwealth has spent more than $1.2 billion -
again, that's billion with a "B" - in subsidizing the cost of indigent
care at VCU Health System, UVA Medical Center and private hospitals.
That figure includes $137 million in FY 2013 alone. Then add to that up
to another $2 billion, from a hidden tax you pay as a part of your
health insurance.
The
Marketplace Virginia program would create the Virginia Taxpayer Recovery
Fund to recapture no less than $1.7 billion each year from revenues
flowing to Washington, D.C. from Virginia businesses and citizens. Each
day we hesitate Virginians are sending $4 to $5 million to Washington
as a result of additional payroll taxes, insurance premium taxes, and
business fees that are a result of the federal law.
Because I believe Virginia knows better than Washington how to address this dilemma, working with the Senate Finance Committee I have sponsored the initiative called Marketplace Virginia.
A
private sector, managed-care model, Marketplace Virginia will put a
pro-business stamp on coverage, while recapturing no less than $1.7
billion each year from revenues flowing to Washington D.C., from
Virginia businesses and citizens. The fund would provide premium
assistance for uninsured Virginians so they can take responsibility for
their own health care decisions.
Not a
give-away initiative, it would require "skin in the game" including
contributions up to five percent of their household income designed to
encourage use of primary care and prevention, and discourage
inappropriate use of emergency room care.
The
benefits of having this Marketplace would include additional funding for
behavioral health; meaningful general fund savings; and improved
access, better outcomes and reduced costs for the thousands of
Virginians now without healthcare coverage.
No plan
in the world, however, comes without some risk, cost considerations and
skepticism . . . the primary risk being that Uncle Sam reneges on its
financial commitment.
Three
contingencies are included under Marketplace Virginia in order to
protect the integrity of the budget process should the federal
government fail to keep its promise:
First,
Virginia participants would be notified UP FRONT that the program is
contingent upon financial commitments from the federal government, and
notified that the program would be discontinued should the federal
government renege.
Secondly, discontinuation of the program if the federal government reneges.
And finally, the plan requires private insurers to notify participants of program changes.
With
regard to cost, the Commonwealth Institute for Fiscal Analysis reports
that whatever form expanding coverage takes, whether it is a straight up
expansion or the premium assistance/private option, it will save
Virginia money in the form of less state funding for the uninsured
through uncompensated care, community-based mental health and substance
abuse services, prisoner health care, etc.
I
believe that reinvesting these dollars will offset the cost that all
Virginians pay, directly or indirectly, to subsidize the cost of
providing indigent care.
Skeptics
say that a waiver from the federal Department of Health and Human
Services would be required to establish Marketplace Virginia. They go
on to say they are issued on a limited basis and only through the end of
2016, when they would be re-evaluated and then replaced by a
longer-term state innovation waiver, the terms of which are not
presently known.
I and
others believe there is no doubt Virginia could get a waiver. The
elements included in my legislation on how Marketplace Virginia would
work are comparable to and have already been included in other states'
applications.
Rather
than a two-year span, the states are usually granted a five-year initial
term. When the original waiver is set to expire, Virginia would submit
a renewal or ask for an extension to continue operations. Extensions
are typically for a three-year period. Furthermore, some waivers have
been renewed several times, allowing operations to continue for several
more years.
Just
because it is done through a plan waiver doesn't change the fact that
the expansion is still optional and the state can back out after the end
of the initial period. Expanding via a private exchange absolutely
does not "lock-in" the state any more than expanding via the traditional
route of expanding Medicaid. Federal law clearly ALLOWS states that
close the coverage gap to return to their original coverage limits at
any time.
The
federal government has cooperated with these types of efforts, issuing
waivers to states with reasonable coverage plans, and I am confident
Virginia would be successful in its application for a private exchange.
I
believe it is time to make use of what is, after-all, our money, to
expand the availability of healthcare coverage for some of our most
vulnerable fellow citizens, friends and neighbors.
Sincerely,
John
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