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Commentary: Health Bill Horror

The U.S. Senate GOP released their own Health Care bill last week, called the (ACHA). While at the time of this writing, the Congressional Budget Office has yet to score the bill, our state agencies have already analyzed it and assessed its impact on the Commonwealth of Virginia.

According to the Board of Medical Assistance Services (BMAS), this federal legislation, or any similar legislation that would be passed by the U.S. Senate, will “inflict a serious cost burden to the Commonwealth, will expose Virginia taxpayers to an increased tax burden, will significantly harm Virginia’s Medicaid program, will derail important medical innovation, and will hobble Virginia’s ability to care for our citizens in most need.”

That is a damning assessment from an apolitical state agency. I cite their statistics in their letter to the Governor frequently in this article.

Most of the damage to Virginia would come from the proposed shift to per capita block grants, which I have written about in past editorials. In an obvious political slight to President Trump, who would have to campaign for reelection after the senators had secured their probable re-elections in 2018, the shift would occur in 2020 but use 2016 as a baseline, which is terrible policy. Imagine if we used 2006 as a baseline for home values. A single year is not an appropriate baseline.

I will focus the bill’s impact on Virginia’s Medicaid program, but it’s easy to anticipate other adverse effects on our commercial health benefits market.

First, our per capita spending on Medicaid is already very conservative. We haven’t expanded Medicaid under the Affordable Care Act (ACA) and Virginia continues to have the lowest permissible level of federal matching for Medicaid at 50 percent. As a result, 75 percent of other states receive a higher Medicaid match than Virginia, putting us a an immediate economic disadvantage.

Second, using 2016 as a baseline would exclude the new Addiction Recovery and Treatment Services (ARTS) program designed to address Virginia’s opioid epidemic, which was declared a public health emergency. A per capita cap would also exclude Virginia’s $46 million developmental disability system investment that also begins this year.

The Senate ACHA uses the Consumer Price Index-Medical (CPI-M) metric, which BMAS says is “ill-suited for indexing Medicaid costs since Medicaid pays for services households typically do not purchase. This also exposes Virginia to potentially devastating retroactive Federal funding changes. If the CPI-M were to drop only .5 percent, Virginia’s seven-year projected funding gap would go from $700 million to $2.1 billion.”

Another reason per capita CPI-M caps are bad is that CPI-M only calculates projections for urban populations and does not reflect the distribution of the costs for certain Medicaid populations like the aged, blind and disabled who have more expensive medical problems. The first year that the ACHA goes into effect, Virginia would lose $22 million, according to BMAS, growing and compounding annually as more boomers age and add to those populations.

Medicaid is an entitlement program so we are required by law to pay certain costs when Virginia creates its budget. Since Virginia has a balanced-budget requirement, the Republican legislature would need to undertake the single-largest tax increase in Virginia history, eliminate or cut medical, behavioral health services, addiction treatment, and long-term support services; reduce eligibility; cut provider payment rates (already only 75 percent of Medicare rates); cut payments to health plans.

At risk here is more than Virginia’s fiscal health. The ACHA would inflict real damage on Virginians like you. Someone who needed nursing care for their daughter currently receives 12-16 hours per day via Medicaid for only $500 per year. The ACHA would force you to choose between paying more than $86,000 out-of-pocket annually or to forego necessary nursing care in addition to pay for items like durable medical equipment and enteral formula.

Providing help to our fellow Virginians in need, who cannot help themselves, not only makes costs cheaper in the long term, but also is a moral imperative. The ACHA doesn’t simply “repeal Obamacare,” a stupid goal by itself, it breaks Medicaid and the entire health system as we know it.