by Dr. Mark J. Berg MD, former Virginia House Delegate (R-29)
“Simple arithmetic shows that Medicaid Expansion will cost Virginia an additional $55 million in 2019 and $1.001 billion in 2020.”
The Medicaid Program is one program of several under the Department of Medical Assistance Services (DMAS). DMAS, in turn, is but one department under the Office of Health & Human Resources (HHR). The increase in Medicaid Program spending makes up almost all of the increase in DMAS and HHR spending.
Despite the most recent 5 year inflation rate of 7.4%, look how spending increased in Virginia:
∙ Virginia’s Medicaid Program Spending Increased 56% from $8.1B in 2015 to $12.7B in 2020.
∙ Reimbursements for Medical Services Increased 77% from $4.98B in 2015 to $8.83B in 2020.
∙ Department of Medical Assistance Services Spending Increased 55% from $8.6B in 2015 to $13.4B in 2020.
∙ Office of Health & Human Resources Spending Increased 41% from $12.9B in 2015 to $18.1B in 2020.
Medicaid Expansion
The cost of coverage for newly eligible individuals (Medicaid for low income uninsured adults) will be $995 million in 2019 and $2.390 billion in 2020. Virginia will get additional Federal Medicaid Trust money of $940 million in 2019 and $1.389 billion in 2020 to cover the added cost. This data comes directly from HB30—the new budget bill.
Simple arithmetic shows that Medicaid Expansion will cost Virginia an additional $55 million in 2019 and $1.001 billion in 2020.
For 2019, subtracting the $940 million “Federal Trust” dollars (the federal reimbursement) from Virginia’s actual $995 million cost of expansion leaves taxpayers $55 million short.
2020’s figures show an even bigger deficit: Subtracting the $1.389 billion federal reimbursement from the actual $2.390 billion spent on expansion costs taxpayers an additional $1.001 billion.
Subtracting 2019’s and 2020’s federal reimbursement of $2.329 billion from the $3.385 billion cost to expanding Medicaid for those two years leaves a $1.056 billion deficit during the biennium (2019-2020), which is an annual average deficit of $526 million. These results are
Total Medicaid spending and Federal Trust money for 2015-2020
are shown in the graph “Trust minus Medicaid 6 yr.”
The Trust minus Medicaid 6 yr. graph represents data taken directly from previously passed budget bills (2015-2017) and the proposed budget bills (HB29 for 2018; HB30 for 2019-2020). Virginia’s Total Medicaid Cost is the difference between the spending and the Federal Trust income. This is $2.475 billion in 2018, $2.622 billion in 2019, and $1.566 billion in 2020.
The average annual Medicaid cost to Virginia over the 3 year period 2015-2017 was $1.027 billion. The average annual cost to Virginia over the 3 year period 2018-2020 is $2.221 billion in the proposed HB29 and HB30. Thus, the Medicaid Expansion will increase Virginia’s annual Medicaid costs by $1.934 billion over the previous annual baseline. This liability will be borne by Virginia’s citizens through higher taxes, assessments, and/or health care costs.
The fact that the cost of coverage for newly eligible Medicaid recipients increases $526 million annually while Virginia’s annual Medicaid costs increase $1.934 billion annually may reflect the fact that the full expansion includes more than the requirements in Obamacare.
For example, the cost of the work training is not reimbursed by the Federal government, and is part of the package pushed by the Medicaid expansionists. Also, there are other non-reimbursed costs, such as the costs to social services departments to find and qualify these individuals. The budget bills do not explain where this extra spending comes from.
