ONE OF the main reasons Republicans in the General Assembly finally agreed to expand Medicaid in 2018—after years of opposing it because they said the costs were unsustainable—was a work requirement added to the legislation that required able-bodied, childless adults aged 19–64 with incomes up to 138 percent of the federal poverty line ($29,436 for a family of 3) to either work, enroll in a job training or job search program, or participate in some sort of vocational training or community service, starting at 20 hours per month.
The work requirement was based on guidelines issued by the U.S. Centers for Medicare & Medicaid Services in January 2018 on “incentivizing work and community engagement,” citing “strong evidence that unemployment is generally harmful to health.”
Last November, the Virginia Department of Medical Assistance Services, which has estimated that 120,000 Virginians would be subject to the work requirement, submitted a request to CMS for a Section 1115 waiver, which gives states more flexibility in administering their Medicaid programs, including adding work requirements.
However in March, D.C. District Judge James Boasberg struck down similar work requirements in Arkansas, the first state to impose them, and Kentucky, ruling that they did not address “the ‘core’ objective of Medicaid: the provision of medical coverage to the needy”—even though the original core objective of Medicaid was to provide coverage to the elderly poor, disabled, and pregnant women with small children.
CMS is appealing.
So while Medicaid expansion in Virginia began on Jan. 1 this year, the work requirement is still languishing in legal limbo. “This just isn’t what we were promised,” complained state Sen. Stephen Newman, R–Bedford, at a recent Senate Finance Committee meeting in Richmond.
Virginians were also told that expanding Medicaid would save them money. But a 2018 study by the Foundation for Governmental Accountability found that in the states that expanded Medicaid when the option first became available under the Affordable Care Act, twice as many able-bodied adults as predicted enrolled, increasing cost estimates by 76 percent.
And two years after one of those states, Oregon, expanded its Medicaid coverage, a randomized, controlled study found that “Medicaid coverage generated no significant improvements in measured physical health outcomes in the first two years, but it did increase use of health care services.”
If the same holds true in Virginia, which already had a higher Medicaid enrollment than predicted, the increased use of health care services will mean increased costs with no significant public health benefits to show for them.
CMS’ actuary reported that “Medicaid expansions during 2019 in Idaho, Maine, Nebraska, Utah, and Virginia are expected to result in the first acceleration in growth in spending for the program since 2014 (from 2.2 percent in 2018 to 4.8 percent in 2019). Medicaid spending growth is then projected to average 6 percent for 2020 through 2027 as the program’s spending patterns reflect an enrollment mix more heavily influenced by comparatively more expensive aged and disabled enrollees.”
Starting in 2020, the federal government will pay 90 percent of the cost of Medicaid expansion. Nationwide, federal Medicaid spending is expected to rise from $576 billion in 2017 to $938 billion in 2027—a 62 percent increase.
Virginia’s 10 percent share will also increase, but it will be hidden in the “bed tax” that hospitals will then pass on to patients with private health insurance carriers, which in turn will raise their premiums to cover the losses.
But as premiums continue to ratchet up year after year, the number of people who can afford to pay more for their own health insurance, in addition to coverage for hundreds of thousands of childless, able-bodied, working-age Medicaid recipients, will steadily decrease until the program eventually becomes financially unsustainable.
But that won’t happen until long after this year’s legislative elections are in the rearview mirror, and lawmakers in Richmond are hoping that voters won’t notice what’s coming their way.