Tom Rust (R- Herndon) has just submitted compromise legislation (HB 5008) to expand Medicaid under Obamacare via the murky Medicaid Innovation and Reform Commission (MIRC). The bill, if passed, would expand Medicaid pursuant to a set of bureaucratic procedural hoops, rather than directly through the legislature.[read_more]
There are only four statutes in the bill, and here is how this whole deal works:
The parties – Va. Code § 32.1-370
Newly Eligible Individuals: This is the technical term for those people for whom Medicaid is expanded to under 42 U.S.C. § 1396a(a)(10)(A)(i)(VIII).
MIRC: The Virginia Commission created by the General Assembly to assess the expansion of Medicaid. It seems to have both legislative and executive powers.
Secretary: This is the Virginia Secretary of Health and Human Resources, currently Bill Hazel.
The Lock Box – Va. Code § 32.1-371
All federal funds will be placed in a separate fund aside from the general fund, this includes the funds for Medicaid expansion that start at 100% of the state costs and decrease to 90% of the costs by 2020 (Provided Congress does not change its mind). 42 U.S.C. § 1396d(y).
Interim help for Newly Eligible Individuals Va. Code § 32.1-372 (Bridge program)
This is a convoluted interim program designed to provide health insurance premium assistance to Newly Eligible Individuals while we wait for the Secretary and MIRC to go ahead and expand Medicaid.
The Scheme – Va. Code § 32.1-373
If you enjoy giving yourself a headache start reading at the beginning of this proposed statute and find where Medicaid expansion occurs. Otherwise I’ll save you the trouble.
The Secretary is supposed to come up with a report for MIRC on how to expand Medicaid and submit it to MIRC by December 15, 2015. MIRC then does the following:
“If the Commission determines that federal medical assistance funds for newly eligible adults as provided in 42 U.S.C. § 1396d(y) or other federal funds combined with current and projected annual savings to the general fund and other nonfederal net savings associated with the implementation and operation of the Innovation Plan are sufficient to cover the costs to the Commonwealth of coverage for newly eligible adults, then the Commission shall approve implementation of such coverage.” Va. Code § 32.1-373(E).
What does all of this mean? Once the Secretary has submitted his report, if the MIRC determines that expansion is paid for by federal funds, or by “cost savings,” then the MIRC must expand Medicaid.
“Cost savings” usually consist of savings due to (government) economies of scale and other rational economic behaviors of individuals interacting with government. In other words, cost savings are magical fairy dust used to obliterate any meaning behind government budgeting.
The Rust plan is nothing more than a convoluted plan to expand Medicaid. With the inefficiencies of the Bridge program, it may actually cost more than simply expanding Medicaid at the outset.