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Analysis says Medicaid expansion pays for itself
Covering more Virginians under Medicaid would be nearly cost-free, independent analysis says; cost estimate differs markedly from Gov. McDonnell's

Date published: 1/17/2013


RICHMOND--A Virginia budget analysis group says Medicaid expansion could pay for itself and is urging state lawmakers to approve it.

The Commonwealth Institute for Fiscal Analysis, which studies economic trends with a focus on low- and moderate-income people, said that because the federal government has promised to cover most of the cost of expanding Medicaid eligibility under the Affordable Care Act, it would free up state dollars now spent on health care for uninsured people.

The Institute also said expansion of Medicaid could create about 30,000 jobs, generating millions of dollars in tax revenue that would contribute to making the expansion essentially cost-free to the state.

"Virginia has a wide variety of options to make the Medicaid expansion pay for itself," Institute president Michael Cassidy said.

Cassidy was speaking at a press conference held by groups advocating Medicaid expansion.

Under the federal health care law, if states choose to expand Medicaid eligibility to cover more people, the federal government pays 100 percent of the cost of expansion for three years, decreasing to 90 percent by 2021.

Republicans, including Gov. Bob McDonnell, have said they don't trust the federal government to keep that promise, particularly when the nation is deeply in debt and when Congress is fighting over how to cut spending to lessen debt and deficit problems.

McDonnell has also said he won't advocate expanding a program that he feels is broken and over which states have little control.

While McDonnell's administration had previously estimated that the Medicaid expansion could cost the state more than $2 billion, earlier this week that estimate was revised down to about $137 million over nine years. That cost would rise to about $722 million over time as the state picks up 10 percent of the cost of the expansion.

The health care advocates at Wednesday's press conference said they think the state would save money by expanding Medicaid, which would allow more adults to have health coverage and save them from costly emergency-room visits.

Jill Hanken, with the Virginia Poverty Law Center, said that while free clinics are available to help some people, they had to turn away 12,000 people just last year. She said that there are 400,000 uninsured people in Virginia.

Many of them do work, the expansion advocates said. Wayne Hamlett said he lost his job and in the 18 months it took to find a new one, he had to rely on the Fan Free Clinic in Richmond to help provide insulin. When the health insurance premiums at his new job topped $400 a month, he had to drop his coverage.

Cassidy said expansion could be made contingent upon federal dollars to pay for it, if Republican lawmakers are worried about the federal money being there.

"States are fully within their rights to tell Congress not to monkey around with the match rates," he said. "Congress needs to stay true to that amount going forward."

Chelyen Davis: 804/343-2245
Email: cdavis@freelancestar.com