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Medicaid Expansion Looms

State wrestles with growth of Medicaid under health care reform

Virginia State News December 2010

After repeated tries, Betty Davis finally got Medicaid to pay the nursing home bills for her mother, Delia Collazo. Virginia ranks 48th in Medicaid spending per capita. That is likely to change when the new health care law requires expansion of low-income assistance. — Matt Eich/LUCEO

After a career as a social worker in Northern Virginia, Delia Collazo bought a condo in her native Puerto Rico where she planned to spend the rest of her days.

Life doesn't always go according to plan. As the years passed, Collazo's memory and health began to fail. Her friends called Collazo's daughter, Betty Davis, in Springfield to say Collazo needed more help than they could provide.

Davis, 62, then began a journey familiar to many families with aging loved ones.

First, she moved her mother, who has Alzheimer's, into her home. But Davis worried Collazo would fall down the stairs or wander away. Then she found an assisted living facility, but within months the fees had consumed her mother's savings.

Davis applied to Medicaid on her mother's behalf, and received approval last year. Collazo, 88, now lives in a nursing home in Falls Church, and Medicaid pays most of the bills.

"You never, never, never know what's going to happen in life," said Davis. "Medicaid puts my mind at ease."

For those who qualify, Medicaid is a lifeline: The federal-state program provides health insurance for low-income people. Most Virginians do not currently qualify — only the blind, disabled, pregnant women, children and their low-income parents are eligible.

Nationwide, 20 percent of Americans are covered by Medicaid; in Virginia, only 11 percent are. Virginia ranks 48th of the 50 states in the number of Medicaid recipients as a percentage of the state population and 48th in Medicaid spending per capita.

All this will change by 2014 when the federal health care law requires all states to expand Medicaid to cover people under 65 whose income is 133 percent of the federal poverty level, which currently is $14,404 for a single person or $19,378 for a couple.

Estimates vary about how many Virginians will be eligible and will sign up for Medicaid. The University of Virginia's Weldon Cooper Center estimates that 464,000 will be eligible, and between 240,000 and 339,000 will enroll in the first few years. The state Department of Medical Assistance Services estimates between 270,000 and 425,000 new Med​icaid enrollees.

Virginia's Medicaid rolls, at almost 950,000, were already growing rapidly because of the recession.

Under the new law, the federal government will pay all of Virginia's new Medicaid costs for two years. Then the reimbursement rate gradually drops to 90 percent in 2020. Federal spending for Virginia to expand coverage is estimated at $9.6 billion.

What happens next is a headache for state officials.

"Every Virginian needs access to affordable health care," Gov. Bob McDonnell, R, said in a statement.

"The challenge is how to provide that access in an economically responsible manner … The tremendous rate of growth in Medicaid spending in Virginia, which is only going to increase due to federal health care reform, is unsustainable," he said.

McDonnell appointed the Virginia Health Reform Initiative Advisory Council to develop a state plan for health care. The panel will produce a strategy for implementing health care reform. After criticism that consumers were not represented on the council, Bill Kallio, AARP Virginia state director, was named to a task force on Medicaid reform.

"I'm encouraged," Kallio said. "We're quite aware the governor does not support the federal health care law and the attorney general is suing against the health care law, but we'll wait to see what happens."

Virginia has challenged the health reform overhaul in federal court, arguing that the government cannot require individuals to buy health insurance. The General Assembly last spring passed a law exempting citizens from the mandate to buy insurance. The lawsuit, joined by more than 20 states, is expected to be decided by the U.S. Supreme Court.

Meanwhile, health care providers and others are planning for an influx of new patients.

Jill Hanken, a lobbyist for the Virginia Poverty Law Center, said, "The irony is that because we had such low levels of Medicaid coverage, Virginia stands to gain so much."

Marsha Mercer is a writer based in Alexandria.

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