A deadlock in the state’s budget, centered over Medicare reimbursement expansion, may have far reaching consequences for smaller localities, especially those on the Northern Neck.
On Monday, March 24, Democratic Virginia Gov.Terry McAuliffe attempted to open the door to the currently deadlocked Commonwealth’s budget negotiations by proposing a health-care system that would include $225M in state savings by the expansion of Medicaid.
It was a move that divided the Republican controlled House, who do not favor expansion, and could parlay into a budget that might not be passed until long after local jurisdictions have to set their yearly line-item incomes and expenditures.
With both sides of the Commonwealth now fighting over whose bill should go forth first in response to the Medicaid impasse, the result could be devastating.
Without knowing what state funding will be, localities are blindfolded as to their appropriations and with left with little recourse but to go by last year’s budget and “guesstimate” what they may receive.
It is a situation that has 99th District Margaret Ransone (R- Westmoreland) clearly concerned for her constituents, many of whom are in rural localities which will be hit hardest by the stalemate as they heavily rely on state appropriations to balance their slim budgets.
The core issue being debated is what is termed at the “Health Care Gap,” which consists mainly of single individuals without health benefits or insurance that lack what the Affordable Care Act deems as “necessary.”
First and foremost, Ransone said that the most important thing for people to understand was the difference between Medicare and Medicaid and how that pertains to the Gap.
During a March 21 interview with the Northern Neck News, Ransone explained that the largest group of people affected by the expansion are single adults. Additionally, Ransone highlighted the differences between the two health policies, which she said can often be confusing due to their similar names.
According to Ransone the differences are as follows:
• Is managed by the federal government.
• Medicare spending is expected to reach $528 billion for fiscal year 2010, or 13 percent of all federal spending. The only larger categories of federal spending are Social Security and defense.
• Patients pay part of costs through deductibles for hospital and other costs. Small monthly premiums are required for non-hospital coverage.
•Provides health insurance to people over 65 primarily, whatever their income; and serves younger disabled people and dialysis patients.
For more information regarding Medicare and its components, please go to http://www.medicare.gov.
• State’s administer their own Medicaid program, however all rules and services must be approved by the federal government. The Virginia Medicaid program is administered by the Virginia Department of Medical Assistance Services (www.dmas.virginia.gov)
• All rules and services must also be approved at the state level and each state Medicaid program is different.
• Each state submits a “State Plan for Medical Assistance” to Washington for federal approval.
• Programs are funded jointly by states and the federal government.
• Individuals are low income to qualify and in Virginia they must also be either aged, blind, disabled, pregnant, a child, or a parent/caretaker of a child.
According to a study conducted by thecommomwealthinstitute.org, people who stand to gain coverage through closing the health care coverage gap are in every legislative district across the state, including 4,260 in localities represented by Ransone.
“When they passed this they lowered the medicare reimbursement rates to hospitals and that is putting health care at risk,” Ransone said, adding that lowering reimbursements to doctors and hospitals would only hurt those who serve the community when they need it the most.
In addition, Rappahannock General Hospital (RGH) in Kilmarnock reports that it stands to lose over $618,000 in funding if the legislature fails to close the Gap.
“We have recently received assistance from the Virginia Hospital & Health Association (VHHA) in estimating the impact of the Medicaid expansion on Rappahannock General Hospital,” said RHG Chief Financial Officer John Headley, before McAuliffe’s announcement on Monday.
“The original Affordable Care Act (ACA) included Medicare reimbursement cuts to hospital providers with proposals to states for Medicaid expansion that would help offset those cuts. In regards to Rappahannock General Hospital (RGH), for the period 2010 through 2014 these cuts totaled $488,000,” Headley said. “As additional scheduled provisions of the ACA become fully enacted , the cuts will increase to approximately $620,000 in 2015 and $800,000 in 2016. If Medicaid expansion is passed by the General Assembly, these cuts will be partially offset by an estimated $360,000 in 2015 and $725,000 in 2016, with a net negative impact to RGH in the amounts of $260,000 for 2015 and $75,000 for 2016.
“In addition, enacted and proposed Medicare cuts outside of the scope of the ACA have been projected to negatively impact the hospital in the additional amounts of $520,000 for both 2015 and 2016,” Headley added.
Ransone said that she would fight tooth and nail to ensure that the cuts to reimbursements would end.
“We are not doing anything wrong,” she said. “The next group of folks that would be eligible for expansion are single adults and I have gone to the community and told churches and leaders, “If you know someone who cannot find affordable insurance let me know so that we can work together.”
Ransone added that while she did not want to discourage or discredit the affordable health care plan, people considering plans should look at what they are currently paying, their deductibles and coverage.
“Instead of expanding it, why don’t we fix it instead because in two years we are going to be back at ground zero,” Ransone said. “Instead of expanding Medicaid, expand the reimbursements for Medicare so we can continue to receive the money that is due to us. The hospitals are performing a service, they are seeing patients and we have good doctors and nurses. This is a disaster.
“We have some time to figure this out. Let’s calm down. Give the budgets back to the localities and take a year to work this out the right way,” Ransone added.