Gov. Terry McAuliffe estimated Monday that Virginia would lose $1.2 billion in federal funding for its Medicaid program over the next seven years under legislation proposed in U.S. Senate to repeal the Affordable Care Act.
McAuliffe said the new proposal – known as the Graham-Cassidy-Heller-Johnson bill – would harm the state in the same way as previous legislation approved in the House of Representatives and narrowly defeated in the U.S. Senate this year to repeal the health-care law.
Those bills would have cost Virginia an estimated $790 million to $1.4 billion over seven years, primarily by replacing the current cost-sharing arrangement for Medicaid with federal per-capita grants to limit federal spending on the program.
The proposal released last week by U.S. Sens. Lindsey Graham, R-S.C.; Bill Cassidy, R-La.; Dean Heller, R-Nev.; and Ron Johnson, R-Wis. would focus on block grants to the states.
“This legislation, like the earlier iterations, was not designed to make health care better,” the governor said in a statement. “It is nothing more than a tax cut for the rich and a poorly disguised cost shift from the federal government to the states and families.”
Those earlier proposals were not well-received by budget leaders in the Republican-controlled General Assembly. They formed the Joint Subcommittee on Health and Human Resources Oversight this year to monitor proposed changes in federal health care law and funding by President Donald Trump and the Republican-controlled Congress.
House Appropriations Chairman S. Chris Jones, R-Suffolk, who also chairs the joint subcommittee, told Virginia Medicaid Director Cindi B. Jones on Monday that he would ask for a detailed presentation on the legislation from her and Secretary of Health Human Resources Bill Hazel “if it’s still alive next month.”
Jones, who appeared before the committee for an update on a Medicaid-financed program to serve people with serious mental illness and substance use disorders, confirmed that the cost to Virginia of the new Senate proposal “is still over a billion dollars.”
She said the proposed per-capita grants would not adequately pay the federal share of care for people with disabilities, behavioral health and long-term care needs, which account for about one-third of the 1 million people in Virginia’s $9 billion Medicaid program but more than two-thirds of the costs.
Jones said the proposal would phase out over the next two years the enhanced federal funding for states that expanded their Medicaid programs before July, 2016, under the Affordable Care Act, which then-President Barack Obama signed in 2010. Enhanced funding would end in November for states that expanded their Medicaid programs since mid-2016.
However, Jones said the proposal law also would keep reductions in federal payments to hospitals for uncompensated care, known as disproportionate share. The cuts were intended to offset anticipated increases in health insurance coverage as states expanded Medicaid eligibility and people purchased policies on the marketplace created under the law.
The proposal also would create a work requirement for Medicaid recipients, although Jones said it would apply in Virginia only to parents whose annual incomes do not exceed about 30 percent of the federal poverty limit, or $9,225 a year for a family of four.
McAuliffe said the Graham-Cassidy legislation also would “gut protections” for people with pre-existing health conditions, who before the Affordable Care Act often could not purchase insurance or afford policies that were available.
He also it also would slash federal subsidies of premiums and out-of-pocket costs for insurance policies purchased on the marketplace operated in Virginia by the federal government.
“Once again, middle-class families, seniors and women suffer the most as premiums will skyrocket and Medicaid will be slashed,” the governor said.