West Virginia’s leaders have a critical decision to make on Medicaid, the government health care program for the poor that’s operated by the states.
The Affordable Health Care law mandates the expansion of Medicaid to families with incomes of up to 133 percent of the poverty level. The aim is to provide health care for low income people who don’t have health insurance.
West Virginians for Affordable Health Care, an advocacy group which supports the law, says the expansion will include up to 157,000 additional West Virginians beginning in 2014. The federal government picks up the entire tab of the expansion for the first few years, but by 2020 the fed’s share falls to 90 percent, with the state picking up the rest.
Supporters of Obamacare believe it’s a great deal. West Virginia hospitals are on board as well because they will get reimbursed for care that now ends up being written off as charity or absorbed by paying patients.
So, more West Virginians get insured health care, hospitals get paid and the federal government picks up most of the tab. A win, win, win, right?
Well, maybe not.
West Virginia’s Medicaid program costs are growing dramatically already. In 2000, the state spent about $1.4 billion on Medicaid, with $350 million of that coming from the state treasury. By 2012, the total cost had doubled and the state’s share had risen to over $800 million.
Program costs are rising much faster than economic growth, which means Medicaid will become an ever larger share of the state budget. And that’s before the massive expansion under the new health care law.
True, Washington promises to pick up most of the tab for the expansion (which, of course is paid for by all taxpayers), but for how long? Federal spending at current levels is unsustainable. It’s possible that at some point the federal government will pull back on the percentage it’s willing to provide to the states.
What happens then? Either the states will have to come up with the extra money or services that people have come to expect will have to be reduced.
The recent U.S. Supreme Court decision upholding the Affordable Health Care Act included a surprise provision allowing states to opt out of Medicaid expansion without penalty. Florida and South Carolina have already said they will opt out and others may follow.
West Virginia Governor Earl Ray Tomblin has not yet made a decision. Last week he sent a letter to Secretary of Health and Human Services Kathleen Sebelius with a series of 14 questions about Medicaid expansion.
Tomblin’s letter gave no real indication which way he’s leaning.
The governor said expanding services for West Virginians could, on one hand, “provide meaningful improvement to the health of our citizens.” But, on the other hand, he said he’s “very cautious in relying on future funding promises by the federal government.”
Tomblin’s opponent in the governor’s race, Republican Bill Maloney, opposes Obamacare, but when I last interviewed him, Maloney was unwilling to say whether he would forego the Medicaid expansion. It could become a moot point if Mitt Romney wins the election and Obamacare is overturned.
Tomblin and Maloney are right to be cautious… for now at least, but they need to have their radar up on this one. Federal programs almost always end up costing more than estimated, and this is a huge expansion of Medicaid.
At some point before the election, West Virginians need to know from both Tomblin and Maloney what they plan to do about Medicaid expansion.