Va. Gov. McDonnell Urged To Reject Medicaid Expansion

July 12, 2012

July 12--Virginia Lieutenant Gov. Bill Bolling sent a letter to Gov. Bob McDonnell urging him not to expand Medicaid under the Affordable Care Act. Under the provisions of the bill, more than 425,000 uninsured Virginians would become eligible for Medicaid coverage. If Virginia chooses not to expand Medicaid coverage, those people would remain uninsured.

Here is the transcript of Bolling's letter:

Dear Governor McDonnell,

I opposed the Patient Protection and Affordable Care Act (PPACA) and hoped it would be ruled unconstitutional. However, the court has now left the fate of the PPACA in the hands of the voters.

I strongly believe that Governor Romney will win the presidency this fall, and with a new Republican majority in theU.S. Senateand the current Republican majority in theU.S. House of Representatives, he will work to ensure that the PPACA is repealed and replaced with more market based health insurance reforms.

However, should the PPACA survive, the most important decision Virginia must make is whether or not to expand our Medicaid program. I am writing to advise you of my opposition to expansion unless it includes fundamental and substantive reform of the current Medicaid program.

Expanding Medicaid under the PPACA requirements would add an estimated 425,000 additional people to Virginia'sMedicaid rolls. The estimated cost of such an expansion would be $31.3 billion over the next 10 years, with Virginia's share being at least $2.1 billion. Additionally, there is no guarantee that the state's share of the expansion would not increase in future years, and these estimates do not include additional administrative costs, which would be borne 50/50 by the federal government and Virginia.

Funding such a significant expansion of Medicaid would place tremendous fiscal pressure on the Commonwealth and divert funds from other state programs, such as public education, higher education, public safety, natural resource protection and even other critically important health care programs.

Medicaid is already one of the fastest growing areas of the state budget, accounting for almost 20 percent of total state general fund expenditures. The cost of administering the Medicaid program has increased by more than 80 percent from 2002 to 2011. This is simply an unsustainable rate of growth that will only get worse if we add 425,000 more people to the program.

In addition, our current Medicaid system cries out for reform. Reform should address the unsustainable cost increases discussed above, but there are other problems with Medicaid that also need to be addressed. For example:

-- The federal Government Accountability Office has identified Medicaid as a high-risk program that is particularly vulnerable to fraud, waste, abuse and improper payments. The Department of Health and Human Services estimated that the federal share of improper payments in the Medicaid program in fiscal year 2010 was $22.5 billion.

--In addition, Medicaid is currently only compensating health care providers for a fraction of their actual cost of service delivery. Because of this, many providers have stopped seeing Medicaid patients or reduced the number of Medicaid patients they are caring for, and I question whether or not the health care delivery system can effectively absorb 425,000 more Medicaid patients.

I have long supported fundamental reform of Virginia'sMedicaid program to reduce cost and improve service delivery. While we have made some progress in this regard, it is my belief that Medicaid is currently a dysfunctional and unsustainable program.

Until and unless there has been significant and fundamental reform of Medicaid, I urge you to reject expansion of this program. This is a program that does not work now, and it will not be improved by simply making it bigger.

Thank you for considering my views on this important issue.

Sincerely,

LIEUTENANT GOVERNOR BILL BOLLING

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