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Judy Ford Wason Center for Public Policy

Wason Center

February 9, 2018

With Compromise Possible, A Look at Medicaid Expansion in the Commonwealth

Issue / State

Wason Center survey examining voter support for Medicaid expansion. 58 percent of Virginians support expansion. 85 percent of Democrats support expansion while 66 percent of Republicans oppose it.

Following the election of Governor Ralph Northam and the wave of Democratic elected to the Virginia General Assembly, the topic of Medicaid expansion has become a salient issue among Virginia legislators and voters. As Virginia lawmakers continue their state budget discussions and proposals, constituents will be looking to see how they address and incorporate Medicaid into their biennial budget.

Past efforts related to Medicaid reform were met with staunch opposition from Virginia Republicans; however, as negotiations over healthcare expansion have unfolded throughout this session, there seems to be a willingness to collaborate from both sides of the aisle. At the Wason Center’s Annual Eggs & Issues breakfast event, both Lt. Governor Justin Fairfax and Del. Steve Landes addressed the importance of bipartisanship collaboration and support throughout this process.

In a letter written to Governor Northam, Del. Cox, speaker of the House of Delegates, said, “the House is willing to begin a dialogue on health care that includes significant reforms and strong taxpayer safeguards, but I want to be clear that the 51-member House Republican Caucus has taken a binding caucus position against ‘straightforward’ Medicaid expansion.”

Virginian constituents have also echoed these notions of bipartisan collaboration. On Wednesday, February 7, the Wason Center released a poll that found that “voters support Medicaid expansion by a small majority overall. While Republicans oppose general Medicaid expansion, a majority of Republicans support a compromise partial expansion.” Looking at the the Wason Center data 56% of voters said that they would support expanding Medicaid, noting that support was stronger among women and black voters and weaker among men, white voters, and voters from Southwest and Southside. Importantly, 53% of voters said they would support a compromise of partial Medicaid expansion if “across-the-board expansion” does not pass the General Assembly.

As the General Assembly continues negotiations over Medicaid expansion, let's take a look at its components starting with a look at the Commonwealth’s current Medicaid enrollment data:

CoverageMedicaid expansion in Virginia would cover roughly 400,000 low-income adults. In 2015, 11% of people in Virginia were covered by Medicaid or the Children’s Health Insurance Program (CHIP), however, since the implementation of the Affordable Care Act, Medicaid, and CHIP enrollment has increased in Virginia from 935,400 to 991,600. As a result, the uninsured rate in Virginia has decreased from 12% to 9%. Medicaid expansion is designed to address the so-called coverage gap which occurs for people who make too little money to afford the subsidized health insurance plans offered on the ACA marketplace and too much money to qualify for traditional Medicaid.

CostMedicaid plays a key role in the U.S. health care system, accounting for 1 in 2 dollars spent on long-term care, 1 in 6 dollars spent overall in the health care system, and more than 1 in 3 dollars provided to safety-net hospitals and health centers. In FY 2016, Medicaid spending in Virginia was $8.6 billion, with 22% of state general fund spending and 42% of all federal funds received by Virginia going towards Medicaid. In Virginia, the federal share is 50%, meaning that for every $1 spent by the state, the federal government matches $1. If states chose to expand their Medicaid programs, they would receive an increased federal share; however, since Virginia did not expand Medicaid in their last budget, they did not receive any additional funds.

As originally designed, the federal government provided incentives to the states to expand Medicaid to those in the coverage gap. Initially, the federal government picked up 100% of the extra Medicaid costs due to expansion and the program is designed to gradually shift some responsibility to the states over time. Opponents to Medicaid expansion argue the program is prohibitively expensive and worry that over time greater shares of the cost will get shifted to the states. From 2014 through 2016, the federal government picked up 95 percent. In 2017 and 2018 the federal government’s share is 94% and will decline to 93 percent in 2019 before leveling off at 90 percent for 2020 and beyond. In California for example, that burden, although small in terms of proportion is quite large in terms of actual dollars, coming in at $1.3 billion dollars.

Although there is much to debate on whether expansion is good fiscal policy or not it is clear that states that accept Medicaid expansion enjoy far fewer rates of uninsured citizens than states that do not. The average uninsured rate in Medicaid expansion states is less than 3%. In states without expansion, it is more than double that rate, with some states such as Texas having uninsured rates 5 times higher.

In our recent survey examining public attitudes toward Medicaid expansion in the Commonwealth, we find that 58% of Virginians support Medicaid expansion, a percent that has remained relatively steady since we first began asking the question a few years ago. As seen in the graph below, there is a sharp partisan divide on the issue.

Wason Center survey examining voter support for Medicaid expansion. 58 percent of Virginians support expansion. 85 percent of Democrats support expansion while 66 percent of Republicans oppose it.

Although 85% of Democrats support expansion, 66% of Republican oppose it. Still, even House and Senate districts that are held by Republicans produce majorities in favor of expansion, which may indicate some room for Republican lawmakers to navigate on this issue.

Our data also finds that more than 50% of respondents in each demographic group are open to a partial expansion as proposed by Speaker Cox, even Democrats. Given the robust support for expansion by the public and their receptiveness to a compromise, it is possible that action on expansion may occur this session.

Wason Center survey which finds that more than 50% of respondents in each demographic group are open to a partial expansion as proposed by Speaker Cox.

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