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Adopt ‘private option’ to Medicaid expansion

Published 10:28am Saturday, March 1, 2014

by Peter D. Pruden III

The Virginia General Assembly will decide whether to accept billions of dollars in federal funds to provide health insurance coverage to low-income Virginians. It is the most important decision lawmakers will make this year, and it will have far-reaching consequences for Virginia taxpayers, our economy and our health care system.

We face this decision because nearly 200,000 working Virginians are caught in a coverage gap between Medicaid eligibility and subsidies for federal health insurance exchanges. They find themselves in this situation because the U.S. Supreme Court struck down a key provision of the Affordable Care Act requiring states to expand Medicaid eligibility to cover them.

As a result, Medicaid expansion is now optional, and states must decide whether to use the billions of federal dollars our taxpayers have paid to expand coverage for the uninsured. So far, Virginia has not done so.

At its core, this is a humanitarian issue. Having served on the Sentara Healthcare Board of Directors for eight years, I have seen the devastation people face when they are unable to afford medical treatment for a serious illness.

We are a prosperous and compassionate enough country that we can afford to help the most vulnerable in our society by providing them access to health insurance. It is the right thing to do, and we can all gain a sense of achievement from improving the health and well being of those in need.

But expanding health insurance coverage for the uninsured is also an economic issue. While it most directly impacts uninsured Virginians who would gain access to coverage, every person in Virginia has something at stake. The taxpayers have big skin in the game, and so does every business in Virginia and every individual with health insurance.

What many people may not realize is that even though the Supreme Court ruled Medicaid expansion was optional, Virginia taxpayers are still paying for it. In fact, we are paying close to $2 billion every year in federal taxes and fees to cover the uninsured.

If Virginia expands coverage for the uninsured we can reclaim that money. But if we choose not to, every dime of that money will stay in Washington, D.C. and will not provide any benefit to the people of Virginia.

Expanding coverage for the uninsured will benefit taxpayers in other important ways. For instance, each year Virginia taxpayers subsidize tens of millions of dollars in emergency room care for the uninsured at public hospitals. By using federal dollars to cover the uninsured and reduce the number of people requiring indigent care at our public hospitals, Virginia taxpayers will save more than $1 billion through 2022.

Businesses and individuals who have health insurance will also benefit from covering the uninsured, because the cost of treating uninsured people at private hospitals is passed onto businesses and insured patients through higher premiums and higher medical bills.

Every year hospitals in Virginia provide more than $600 million in uncompensated care for the uninsured, and most of that cost falls on the shoulders of those of us who have health insurance and businesses that provide insurance to their employees. Expanding insurance coverage will reduce the financial strain.

While most states have expanded their Medicaid programs to close the coverage gap, a bipartisan coalition in the Virginia Senate has proposed a more cost-effective market-based solution that uses federal dollars to offer private health plans to the uninsured.

This “private option” allows our state to reclaim the federal taxes we have paid to expand insurance coverage, but in a fiscally responsible way that will control costs and protect the taxpayers.

The private option ensures the most efficient use of taxpayers’ money by relying on private health plans that encourage cost-saving preventive care and promote healthy behavior. This plan would improve the health of 200,000 uninsured Virginians, save taxpayers’ money and reduce the financial pressure of rising health care costs on all Virginians.

That is why a historic coalition of business leaders, hospitals and nonprofits have joined together to support the private option. We may not all agree on the merits of the Affordable Care Act, but we all agree the private option is the best approach to solving the crisis of the uninsured and making the ACA work for Virginia taxpayers and our economy.

PETER D. PRUDEN III is president of The Pruden Foundation, co-owner of Taste Unlimited and a member of the Sentara Healthcare Board of Directors.

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