Virginia legislative budget leaders had a quick response to a new health care plan proposed by Republicans in the U.S. Senate — please don’t do what you just did.
The Republican co-chairmen of the Joint Subcommittee for Health and Human Resources Oversight said Thursday that the Senate’s current proposal “fails to address the inequities in the federal funding allocation between states” for the Medicaid program that Virginia has operated in partnership with the federal government for a half-century.
“We urge you to seriously consider the impact on states, especially related to the Medicaid program,” House Appropriations Chairman S. Chris Jones, R-Suffolk, and Senate Finance Co-Chairman Emmett W. Hanger Jr., R-Augusta, said in a three-page letter to U.S. Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Charles E. Schumer, D-N.Y.
The subcommittee had stated its concerns in a meeting earlier this week, but it sent the letter hours after McConnell and fellow Senate Republican leaders released their proposed legislation.
Gov. Terry McAuliffe’s administration said the measure would help states that expanded their Medicaid programs under the Affordable Care Act at the expense of states that didn’t, while reducing long-term federal funding for a program that has been shared equally with the state.
“States that expanded get more money for longer, and states that didn’t expand get less,” Secretary of Health and Human Resources Bill Hazel said in an interview Thursday. “It’s hard to dispute that the gap is increasing.”
Hanger, who had supported McAuliffe’s unsuccessful attempt to expand the state’s Medicaid program under the ACA, agreed that the Senate proposal “certainly gives the expansion states a softer landing over time” by delaying the elimination of enhanced federal payments until 2024.
“Where it leaves us in Virginia is we just forfeited several billion dollars for no good reason,” he said in an interview.
GOP opponents of Medicaid expansion defend their decision not to use federal money to expand eligibility but say Virginia shouldn’t be short-changed in funding for a program that serves 1 million Virginians — children and pregnant women, elderly in nursing homes, and people with serious disabilities.
“Virginia has been a prudent steward of Medicaid funding and should not be penalized for making a policy decision to not expand Medicaid eligibility pursuant to the Patient Protection and Affordable Care Act,” Jones and Hanger wrote in their letter.
Legislators who disagreed on expansion appear united in their concern that legislation approved by the House of Representatives and proposed by the Senate would undo a 52-year-old bargain between the U.S. government and states to share the costs of providing health care to categories of the neediest citizens.
“I don’t think there’s anything wrong in looking for ways for states to have more flexibility, but you can’t just cut folks off,” said Del. John M. O’Bannon III, R-Henrico, a neurologist who is facing a rare election-year challenge, in part because of his opposition to Medicaid expansion.
O’Bannon also is a member of the joint subcommittee created in response to the election of President Donald Trump and the likelihood that the Republican-controlled Congress would attempt to repeal and replace the health care law then-President Barack Obama signed in 2010.
The joint subcommittee is especially concerned that proposals to impose per-capita caps on federal Medicaid spending would put Virginia at a severe disadvantage because they would base the future federal share on past spending that has been among the lowest in the country and would not take into account measures adopted this year to expand treatment of people with mental illnesses or addictions.
The U.S. Senate proposal would change the base year for the caps from fiscal 2016, as approved by the House, to allow states to choose their Medicaid expenditures over eight financial quarters, from the beginning of 2014 through the third quarter of this year.
But Senate Republicans also propose to cut the growth in future spending by basing it on the consumer price index instead of medical inflation after 2014. That would save the federal government money, Virginia officials said, but it would harm state programs by not adequately allowing for enrollment growth.
“This is much harsher even than the House version,” said Hazel, a former orthopedic surgeon who has served Republican and Democratic governors.
His current boss, McAuliffe, called the Senate proposal “a disaster for Virginia families, our health care system and our budget.”
The proposed per-capita cap on Medicaid spending would leave state lawmakers “with the choice to cut critical health and long-term care services for people who need them, slash schools and transportation, or raise taxes,” the governor said in a statement Thursday.
Virginia’s two U.S. senators, both Democrats, also voiced strong opposition to the Republican proposal.
Sen. Mark Warner hosted a number of Virginia families with disabled children at his office to highlight the potential human costs of cutting Medicaid spending, and Sen. Tim Kaine cited what he termed the damage to public school budgets that depend on Medicaid reimbursements for health services to eligible pupils.
In contrast, the joint subcommittee’s letter represents bipartisan concerns of four senators and four delegates who have been evenly divided on the issue of Medicaid expansion.
The subcommittee called for financial parity among states in federal Medicaid funding “so that non-expansion states are not disadvantaged by their policy decisions.”
It also said that “states must be explicitly given flexibility to manage their Medicaid programs by changing program requirements in order to meet the needs of their citizens while better controlling program costs.”
The subcommittee urged a different approach than the House bill in basing future federal spending under per-capita limits, including the possibility of periodic “re-basing” of those limits to reflect needs to comply with federal health care mandates on states, rising drug costs and public health emergencies.
The letter also asked for changes in the proposed legislation to reflect the widely varying costs of care for Medicaid recipients, depending on whether they are children and pregnant women who cost relatively little or elderly and disabled adults, who account for much of the program’s cost in Virginia. The Senate proposal would exempt only blind or disabled children from the per-capita limits.
Finally, the subcommittee urged Senate leaders to include money to “achieve stability in the individual marketplace” created under the Affordable Care Act for people to buy health insurance with subsidies for premiums and out-of-pocket expenses.
“We believe that preserving access to private health insurance is an important component of any legislation that passes Congress in order to ensure that the 410,726 Virginians enrolled in a marketplace plan ... continue to maintain their coverage,” Jones and Hanger wrote.