Money Doesn’t Grow on Trees
At one point during haggling over a new state budget, it was said spending on Medicaid might have to be reduced by $34.1 million. Because the federal government covers much of the program’s cost, that would have meant $100 million less from Washington, for a total cut in West Virginia’s Medicaid program of around $134 million.
All other things being equal, that could have meant cutting off Medicaid benefits for approximately 24,000 people.
Remember just a few years ago, when we were being assured there would be no problem expanding Medicaid enrollment in the Mountain State? That it could be paid for without breaking a sweat?
Whatever happened to that?
Severe Medicaid cuts probably will not occur next year in West Virginia. But the very fact that at one point they were thought essential tells us all is not well with the program.
It’s complicated. The basics are that Medicaid costs state taxpayers about $719 million directly. About $2.4 billion more comes from the federal treasury, which is funded partly by West Virginians.
In 2013, the state’s Medicaid program covered 354,544 low-income and disabled people. Then Obamacare reared its head, with a mandate that states expand enrollment in the program.
Some states refused to go along, but then-Gov. Earl Ray Tomblin approved expansion for West Virginia. Now, more than 564,000 people are covered. That’s an increase of about 210,000 enrollees.
Former President Barack Obama and the Congress at that time sold expansion to the states by promising the federal government would pay all costs for the first few years. No one remembered the warning about Washington: What the federal government giveth, the federal government can taketh away.
But this year, federal support began phasing down. By 2020, states will have to pay 10 percent of the price tag for enrollees covered by the expansion. A quick calculation based on averages shows that will increase West Virginia’s Medicaid bill by nearly $118 million a year.
Add that to the current $719 million and the total comes to $837 million — about 20 percent of the state’s entire General Revenue Fund budget.
So Medicaid is a major concern.
In 2013, some people, including this writer, warned that expanding Medicaid was far from the unmixed blessing proponents claimed. At the time, I pointed out we were having trouble paying for Medicaid without expansion. Even a small increase in the program’s cost could be a big problem, voices of caution warned. But Tomblin went ahead.
As it turns out, that $118 million more mentioned above may be only the tip of the iceberg.
Congress has been debating how to repeal and replace Obamacare for months. That simply has to be done; the so-called Affordable Care Act has turned out to be unaffordable for millions of Americans.
But a plan in the House of Representatives would cut back on federal support for Medicaid expansion. Instead of 10 percent, states could find themselves paying much higher tabs — or telling enrollees covered by the expansion that, well, it was nice while it lasted, but it’s over.
My guess is that won’t fly, in the end. President Donald Trump already has described the House plan as “mean.” It is unlikely senators, one-third of whom are up for re-election next year, will have any enthusiasm for explaining to voters covered by the expansion that they may lose their Medicaid benefits. There are as many as 18 million of them nationwide.
Here’s the problem, both in West Virginia and throughout the nation: Americans were sold on Obamacare, including Medicaid expansion, based on what amounts to a belief that money grows on trees.
It doesn’t, and the bill some of us warned about is coming due.
Myer can be reached at: email@example.com.