Stuck in the Middle

Stuck in the Middle

Healthcare reform could leave Virginia with a widening Medicaid gap.

“This will create huge pressures on the states.” — Richard Merritt, former director, Intergovernmental Health Policy Project at George Washington University

While the healthcare debate rages in Washington D.C., in Northern Virginia many of the most vulnerable are left wondering how the reform will impact their access to medical care. For 400,000 Virginians who currently fall in the gap between the poverty-level Medicaid and insurance markets, it means the end to any hope of expanding Medicaid in Virginia. For Arlingtonians either on Medicaid or in the private insurance market, cuts to entitlement programs and federal subsidies for the insurance market could start to push them into the Medicaid gap.

“If the House Republican bill were to become law it would have an enormous impact on the poor and uninsured in [Northern Virginia] both short-term and long- term,” said Richard Merritt, former director of the Intergovernmental Health Policy Project at George Washington University and chair of the Alexandria Public Health Advisory Commission. “Short term, it would likely scuttle any possibility of the Virginia General Assembly expanding the Medicaid program, as permitted under Obamacare … Over the long term, if federal payments for Medicaid are block granted or capped to the states as the bill calls for, it will mean a huge shift in responsibility for the health care needs of the poor to states and localities, most likely leading to even greater restraints on access to care for the poor.”

Dr. Basim Khan, the executive director of Neighborhood Health Virginia, helps provide healthcare to residents of Arlington, Alexandria, and Fairfax County. Neighborhood Health provides primary medical care, internal medicine, family medicine, pediatrics, dental and mental health services.

“We have about 16,000 patients we serve every year with 50,000 visits,” said Khan. “The vast majority of are low income. About half are uninsured and the other half have insurance, primarily Medicaid, Medicare, and insurance.”

Khan said in Alexandria, Neighborhood Health Virginia is the only provider for many of these services, while in Arlington the Free Clinic also provides care.

“The biggest concern related to health reform is that if people lose insurance, it will increase the demands for our services, which are already pretty high,” said Khan. “We’re trying to grow to meet the demand, but if people lose insurance, it will reduce their access to healthcare. Specialty care in particular can be a challenge for someone without insurance.”

Because Medicaid never expanded in Virginia, Khan and Merritt both noted that those in the Medicaid gap are unlikely to see much difference, but that pool could start to get larger at each end as more restrictions are put on who can receive Medicaid and more people lose access to insurance plans from the Obamacare private exchange market.

“Things never got much better for [those in the middle],” said Khan. “The effect on Virginia might not be as large as other states, but frankly we were in a difficult position to start with.”

“There’s not much of an impact [for the working poor],” said Merritt. “You’re taking away something that was never granted to them. Even under Obamacare, these people never qualified.”

Merritt said the continued decision not to expand Medicaid in Virginia left those with an income above 50 percent of poverty level without coverage.

“That shows you how stingy Medicaid levels are in Virginia,” said Merritt. “This population is not going to be affected because they never had Medicaid to begin with. In the long term, the impact will be the same: they’re not likely to get it.”

Meanwhile, for the existing Medicaid budget, “Virginia could lose more than $314 million from its general fund budget if the new Congress and President make good on their promise to repeal the Affordable Care Act, according to estimates by Virginia’s Medicaid director: Cynthia B. Jones, director of the Department of Medical Assistance Services,” said Frank Shafroth, director of the Center for State and Local Government Leadership at George Mason University, in an email. “The estimated losses — $123.2 million in the next fiscal year and $191.2 million in the budget year that begins in mid-2018 — reflect an outright repeal of the healthcare law, without knowing what would replace it.”

For those on Medicaid, Merritt said it means the state could be forced to decide whether it will provide healthcare for the elderly and disabled or mothers and children.

“The people on Medicaid now will be at risk of having their Medicaid eligibility curtailed,” said Merritt. “70 percent of those who qualify are moms or children, but only consume 20 percent because their needs are not as expensive.”

The other group, Merritt said, are the elderly and disabled who are fewer in number but consume more of the cost. Most of those expenses go towards nursing homes.

“This will create huge pressures on the states,” said Merritt. “They’re going to be pitting the elderly and the disabled against the moms and the kids. It’s not going to happen next year or year after, but it’s the likely outcome. Costs will continue to go up, and the state won’t have matching payments. States are going to have to cut back on those services or raise taxes, which is not likely to happen. Will have to choose between cutting back on nursing home services or services for children/moms.”

Meanwhile, Northern Virginia hospitals are closely watching the discussion in Washington D.C. but say there’s still much to be seen as the bill works through the Senate.

“The honest answer is that it is too soon to tell,” said Robin Norman, senior vice president and chief financial officer for the Virginia Hospital Center. “The new direction of healthcare legislation is not clear at this time. Having said that, I will say that the anticipated impact on healthcare providers is that reimbursement will remain tight and at Virginia Hospital Center we will continue to provide the highest quality care at the best value for our community.”