Healthcare Business News

Reform Update: Virginia ponders Medicaid 'private option' alternative as Arkansas rethinks it

By Virgil Dickson
Posted: February 18, 2014 - 5:00 pm ET

Virginia's Democratic-controlled state Senate is floating an alternative path to help up to 400,000 low-income residents get healthcare coverage without the state formally expanding its Medicaid program.

Under the proposal, included in the Senate's budget proposal, the state would use an additional $2 billion a year in federal matching funds to subsidize private insurance premiums.

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The policy mirrors the model put in place in Arkansas; but just enough Republicans in that state had cold feet about the idea that the House voted Tuesday to withdraw funding for it. It also follows the lead of Iowa, Michigan and Pennsylvania, where Republican lawmakers have sought to charge premiums for at least some of the newly eligible beneficiaries.

In Virginia, Republicans aren't biting.

The plan has the support of the Virginia Hospital & Healthcare Association, which said it builds on the state's experience of relying on private health plans and health systems to assume risk, coordinate care and manage costs for the newly covered population.

A detailed proposal that would be submitted to the CMS has not yet been drafted, but a summary of the program in Virginia Senate documents indicates that like Pennsylvania and Iowa, it will seek to charge a premium of up to 5% of total household income.

It's unclear if the state is seeking to charge the premium to people under the federal poverty level, as Pennsylvania has asked to do. The CMS has yet to announce if it will authorize Pennsylvania's waiver, though experts believe it's unlikely the agency will approve premiums for people with income under 100% of the poverty level.

Virginia's Republican-controlled House has indicated that it will not move forward on the Senate's suggestion because leaders view the policy as a backdoor way to expand Medicaid, a program they say is too costly and wasteful. Virginia Democratic Gov. Terry McAuliffe, who replaced Republican Bob McDonnell last month, enthusiastically supports expanding the program, but he still needs the House's support.

The resistance has frustrated advocacy groups that are still hoping to nudge their state toward the coverage goals of the healthcare reform law.

“In all parts of the state, these are the voices of real people who are directly affected by the decision that the House has made to ignore the needs of 400,000 Virginians who need health coverage,” said Sandra Cook, chairperson of Virginia Organizing, a nonpartisan statewide grassroots organization. “We are calling (lawmakers) to stop playing political games with the lives of people struggling every day with healthcare costs.”

Arkansas House Majority Leader Bruce Westerman today claimed that his state regrets the private option it pursued in lieu of Medicaid expansion. Speaking at a news conference organized by Virginia House leaders, Westerman added that the state rushed to accept the federal dollars and warned Virginia not to do the same.

The Virginia House released a budget proposal that gives hospitals an extra $81 million to help community and teaching hospitals cover inflation expenses and increase funding to the state's free health clinics by $6 million.

“That's a drop in the bucket that may end up being a one-time thing that doesn't insure anyone,” said Christopher Nye, CEO of the Harrisonburg (Va.) Community Health Center, a federally qualified community health center. “We'd much rather the uninsured get coverage.”

If the state expanded Medicaid eligibility as outlined in the Affordable Care Act, about 1,000 more of the center's patients would have health insurance, Nye said.

The two branches need to come to a consensus on their proposals for the state budget soon to avoid a government shutdown. Virginia's General Assembly session ends March 8.

“Everyone has their lines drawn in the sand and it's going to be a matter of who blinks first,” Nye said. “Unfortunately we're talking about up to 400,000 who live here in Virginia.”

Kansas Medicaid advocates ask, “What Would Jesus Do?”

About 50 advocates gathered Monday inside the Kansas Capitol in Topeka arguing that the state should expand Medicaid under the Patient Protection and Affordable Care Act because Jesus would.

The rally, organized by local chapters of the liberal group, featured people claiming that it's immoral for Kansas not to accept federal funds to help the poor get health coverage, with some wearing black T-shirts saying, "Jesus would expand Medicaid."

As many as 240,000 Kansans could become eligible for coverage if the program expanded.

Last year, however, the state Legislature enacted a budget law prohibiting a Medicaid expansion through June 2015, and lawmakers indicated that they doubt an expansion will ever take place. There has been no proposal for expanding Medicaid introduced in the Legislature this year.

Republicans control the state's House, Senate and governor's mansion.

Follow Virgil Dickson on Twitter: @MHvdickson

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