by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Northam’s assertion that expanding Medicaid — a program previously reserved for the elderly, the disabled, pregnant women, children, and impoverished families — to working-age adults with no kids and no disabilities “is a no-brainer” largely relies on a fundamental misunderstanding of how the expansion is paid for.
“Every year since 2013, Virginia Republicans have rejected proposals to expand Medicaid,” Northam wrote in an April op-ed. “To date, we have forfeited $10.4 billion of our tax dollars by forgoing expansion — money we literally send to surrounding states we are competing with.” …
… But that’s not how the Medicaid expansion works. Instead, as the Congressional Budget Office has explained, “of the costs that states incur for newly eligible enrollees under the ACA, the federal government will pay 100 percent from 2014 through 2016, a declining share during the next few years, and 90 percent in 2020 and thereafter.”
In other words, the law promises a bottomless pit of money for any and all states that expand Medicaid, rather than creating a fixed pot of money that’s divided up among states that opt in. “If a state doesn’t implement the ACA Medicaid expansion, the federal funds that would have been used for that state’s expansion are not being sent to another state,” a 2015 Congressional Research Service memo affirmed. “There is not a set amount of federal funding for Medicaid.” …
… The enrollment flood — and higher per-enrollee spending than expected — has resulted in dramatic cost overruns, soaking federal taxpayers for billions and putting state taxpayers on the hook for a gradually increasing percentage of those costs. Kentucky’s expansion was nearly $2 billion over budget after 18 months. In Ohio, Kasich’s Medicaid expansion has cost twice as much as he said it would.
By rejecting Medicaid-expansion funding and the attached strings, Virginia Republicans have saved federal taxpayers billions of dollars and avoided crowding out state programs for the truly needy with spending on a new handout for able-bodied, working-age adults.