Friday, May 25, 2018
Virginia is at a healthcare crossroads. Are we going to double down on ObamaCare by extending Medicaid to 400,000 - 600,000 new participants? Supporters hurl invective and accuse opponents of callous disregard. In fact, it's supporters who are disregarding or ignoring past experience and the laws of economics. They are putting a bandaid on an open wound.
Let me be clear, there are thousands of Virginians who can't afford health insurance – and desperately need it. Supporters of the proposed Medicaid expansion are leading people to believe that government funded health care is the simple solution to the problem. The real solution is much more complicated.
We need to bring down health care costs, increase competition between health insurers and providers, reduce insurance premiums and deductibles so that more Virginians can afford health insurance. Legislation that would have allowed insurers to offer lower cost catastrophic care insurance and that would allow organizations like Chambers of Commerce to offer group plans under their aegis would have made a difference. It had broad bipartisan support but was ultimately the subject of a purely political veto by the Governor.
It's no wonder that health care costs are ever increasing with health care consolidations that leave communities with one hospital that employs virtually every doctor and even owns a captive health insurance company. It's no wonder that they support the Northam/Jones/Hanger compromise. It is projected to yield additional net revenue to hospitals in excess of $500 million. The hospitals will be subjected to a $600 million "bed tax" on hospital admissions, but that will be passed directly to Virginians' hospital bills and insurance premiums.
We are adding perhaps 500,000 people to Virginia's Medicaid rolls without ever addressing what we know are fundamental, institutional defects in Medicaid. In Virginia, Medicaid spending increases have outpaced total state budget growth over the past 10 years and has comprised of over a fifth of the general fund budget in 2016, up dramatically since 2007. And that increase is mostly due to rising enrollment. In a nutshell, Medicaid spending is out of control. And we know that Medicaid reimbursements are significantly lower than private health insurance and frequently doesn't even cover base costs. In fact, private health insurers can reimburse physicians at a rate almost 63% higher than Medicaid does.[1] To make up the difference, healthcare providers respond by shifting costs to those covered by private insurance, driving up their rates and deductibles. Or they leave the marketplace, leaving some Virginians with only one provider to choose from and giving that provider the freedom to impose whatever price they want for their premiums. The ultimate result is predictable. Over the next two, three and four years, more people covered by private health insurance are going to be facing higher premiums and higher deductibles. In fact, we have already seen this here in Virginia with double digit rate increases for the past few years. These increases will price more people out of the health insurance marketplace and we are going to be right back here in the same place looking at another expansion of Medicaid before we know it. Many on the left would say "good, and the sooner the better." These are advocates for universal government funded health insurance that has dismally failed the citizens of Canada and England.
Before the so-called Affordable Care Act – Obama Care – Americans really did like their doctors. They liked their hospitals. They liked their health insurance coverage. The system wasn't flawless, but it was sustainable. This system is not sustainable. And all that we are doing with this monumental expansion of Medicaid expansion in Virginia is doubling down on that error and the liberal policies of the last Administration.
There has been a lot of talk about this being a "conservative" Medicaid expansion. There's nothing conservative about it. It is simply an irresponsible and shortsighted extension of a broken, albeit originally well-intentioned, government welfare program. Self-proclaimed conservatives who came up with this plan cling to the fact that there is a "work requirement." There's no meaningful work requirement. It has no accountability and even uses the words "community organizing" to describe the activities that qualify. There's no help for Virginians who are struggling to pay their insurance premiums or skyrocketing deductibles. The only help that was offered for those challenges were three bills that were vetoed and killed by Governor Northam.
Sadly, those who have given up the fight and embraced this expansion of Obama Care have made a colossal mistake. They are not advancing any kind of conservative agenda or reform – nor are they helping Virginians that are struggling to make ends meet, which is what they purport to be doing. They are helping advance the cause of the likes of Elizabeth Warren, Nancy Pelosi and now Ralph Northam to lead us on an inextricable march towards an entirely government run healthcare system – with no freedom of choice, exorbitant prices and no freedom to choose how to spend our hard-earned dollars. News reports say that there are enough votes in the House and Senate to pass a budget that embraces this Obamacare expansion. That may be true. If it does happen, we're going to look back at this as one of the biggest legislative mistakes we've made in decades and those responsible will have to answer their constituents.
Mark Obenshain
Virginia's About to Take a Wrong Turn on Healthcare
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