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VA Democrats hold budget hostage to Obamacare expansion

by Delegate Michael Webert

Virginia deserves a clean budget

As the 2014 General Assembly Session readied to adjourn, the House outlined a fiscally conservative, responsible budget that would provide critical funding for our teachers, schools, emergency personnel and local governments. Yet, with a simple partisan vote in the Virginia Senate, the Commonwealth’s budget was taken hostage with no regard for reconciliation. In fact, Senate Democrats violated a compromise that resulted from the 2013 session- the Medicaid Innovation and Reform Commission (MIRC). The purpose of the MIRC was to allow the Commonwealth to undergo reform before discussing the expansion of the Medicaid system.

Making something better before making it bigger was once a commonsense practice. Unfortunately this mantra has been cast out so that the Governor can use the budget as a bargaining chip. Compromise is a two way street. House and Senate Republicans have led the discussion on Medicaid and introduced the only substantive ideas for compromise. However, every effort to reach an agreement has been rejected by Democrats: First it was disregarding the MIRC; then it was having a special session to focus on Medicaid separate from the budget. Further, House Republicans offered to extend session 30 days and address Medicaid on its own merits. If these alternatives weren’t enough, one Republican Senator even suggested what has become known as “Marketplace Virginia,” a private exchange alternative.

It seems that all Democrats have been able to say is “NO.” The “it’s my way or we’ll shut down the government” mentality is not the Virginia way and is not good government. By threatening to veto a budget and shutdown the Commonwealth, Governor McAuliffe is setting a recklessly selfish precedent at the expense of all Virginians. Senate Democrats have been in lockstep with the Governor by encouraging this impasse. Marketplace Virginia, presented by Senator Watkins, did not pass from Senate Finance to the floor for debate; however, Senate Democrats were swift to inject some of its language into their budget thereby creating an ill-defined demand for Medicaid expansion and violating the prior agreement that established the MIRC.

Excluding the language from Marketplace Virginia, the current difference between both the House and Senate budgets is only $26 million. In a budget that totals more than $90 billion, this is minuscule. However, the 29 lines of proposed code that were injected into the Senate budget pose a significant threat to the way in which the Commonwealth functions. 17 Senators, 66 House Republicans, and 1 House Democrat have expressed serious reservations about the Marketplace Virginia language. On its face, the proposal is a vague, conceptual outline of a program that would create grave financial liabilities for the entirety of the Commonwealth. Passing this type of language is the equivalent of saying, “we need to pass it to see what is in it.” The fiscal stability of the Commonwealth needs to be of the utmost importance- this “leap before you look” approach is irresponsible and could jeopardize the health, safety, and welfare of millions of Virginians by placing the entire state in disarray.

There are serious issues with legislating the general concept of expansion without delving into the details of the program. By rushing in blind, the General Assembly would welcome a number of unintended consequences that could reasonably be avoided by discussing Medicaid proposals based on their merit. By not thoroughly examining these issues, we would be unable to consider the actual cost to administer the program’s expansion. For example, the Department of Social Services shares personnel between the state and our localities. Our current system has difficultly fulfilling entitlements as is. Expanding the number of entitlements without first ensuring we have the appropriate mechanisms to do so would be disastrous. Localities would be forced to invest in an inadequate system and raise taxes to do so. Ultimately, this would create additional strain on localities and increase the number of individuals who do not receive the entitlements to which they have been promised.

Fauquier County is currently in the process of appropriating a budget under heightened demand to fund essential services such as emergency personnel and schools. By forcing the county to pay for even more administrative staff, Medicaid expansion would impose an unfunded mandate upon the county. Further, the implementation of Marketplace Virginia would create regulatory issues since it departs from traditional Medicaid reimbursement rates. As opposed to the typical 70 cents on the dollar reimbursement provided by Medicaid, Marketplace Virginia would rely on private insurers and could be subject to significantly higher rates. It should also be noted that the federal government has not approved waivers for this type of program.

Medicaid expansion must be separated from the budget; it must be properly vetted. We have seen the disastrous effects of the Affordable Care Act, many of which could have been avoided by practicing good government. We must take a responsible, measured approach to the future of the Commonwealth. We must provide suitable funding to our localities, public safety folks, and schools as opposed to demanding taxes be levied to fund the expansion of an inadequate Medicaid program. It is my firm belief that we must decouple Medicaid from the budget, evaluate it on its own merits in special session, and pass the budget now.

 

Comments

comments

3 Responses to VA Democrats hold budget hostage to Obamacare expansion

  1. Dominic Ruibal Reply

    May 6, 2014 at 6:59 am

    So did these states specifically raise taxes to fund Medicaid expansion? I see nothing here that indicates that. Besides your argument falls short because the tax burden to fund all of this is already being collected under the ACA. The ACA raised Federal taxes specifically to fund this expansion, hence the commitments it has made under the law that you and Mr.Webert are basically assuming it won’t meet. I’m sorry but hiring a few more clerical staff to handle more applications is not going to result in any major budget shortfall.

  2. Dominic Ruibal Reply

    April 28, 2014 at 9:47 pm

    I ask that Mr. Webert and/or the publishers of this site give an example of a state that has had to raise taxes in order to expand Medicaid. There are over 20 that have expanded the program. I want to know of one that has raised taxes in order to do so.

    • Anton Afterwit Reply

      April 29, 2014 at 1:15 pm

      Mr. Ruibal – I think you are failing to grasp some basic facts of economics and truth. There are 26 states that have expanded coverage. Of those states, the top 5 that increased taxes are Delaware, California, Illinois, New York, and Rhode Island. Of those that expanded Medicaid, 15 are in the top 25 states with the highest unfunded liabilities, and 13 are in the top 25 states with revenue shortfalls.

      When you have unfunded liabilities and revenue shortfalls, you cannot continue spending money. So while the politicians of today are continuing to spend like drunken sailors, the time will come when they have to address those unfunded liabilities and deficits.

      To put it in simple terms, deficit spending is like using credit cards to pay off your debt each month. Eventually you will hit the wall where you will not be able to borrow any more to cover the monthly payments. And remember that the monthly payments include only a small portion of the principle and borrowing more to try and pay is not the answer.

      If any of the other 26 states have not raised their taxes yet (cannot find a most current list), they will shortly to address those unfunded liabilities and deficits. They will not have a choice lest they want to wind up like Detroit and several California cities already (6 total on that list have municipalities declaring bankruptcy).

      You cannot spend what you do not have and you cannot tax your way to prosperity. Mr. Webert and the others standing against the expansion of Medicaid understand that we do not have the money to spend on the future liabilities this would cost the state.

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