The McDonnell administration increased its estimate for Virginia’s cost of President Obama’s health care overhaul to about $1.5 billion through 2022, a roughly $400 million jump from the governor’s initial forecast.
McDonnell, at the federal health bill’s passage in March, estimated the legislation would cost Virginia $1.1 billion over the next dozen years by adding as many as 400,000 people to Medicaid rolls.
The upward revision is mostly because of bad news from the federal government on how 80,000 low-income children and teens will be covered under the new law. When the Virginia Department of Medical Assistance Services made the first estimate, it assumed those youths would stay in the Children’s Health Insurance Program, or CHIP, which provides the state with a generous federal match, said Virginia Secretary of Health and Human Resources Dr. Bill Hazel. Instead, they will be enrolled in ordinary Medicaid, which shares its costs 50-50 with the state, federal officials have told Virginia. “In the new plan, [the youths] get converted to standard Medicaid, which means we get a lower federal match, which means it costs us more money,” Hazel told The Washington Examiner.
Gov. Bob McDonnell, a Republican, is an outspoken opponent of the sweeping health law, the largest parts of which — including the expanded Medicaid enrollment — take effect in 2014. The federal government will pay 100 percent of the new Medicaid costs for the first three years, eventually reducing the subsidy to 90 percent.
While the increased enrollment will cost Virginia and other states money, the federal share nevertheless amounts to “a pretty good deal” for the commonwealth, said John McInerney, health policy director for the Commonwealth Institute for Fiscal Analysis, a Richmond think tank. The dozen year, $1.5 billion estimate looks “more reasonable” when viewed annually, he said.
That figure no doubt will find its way into political campaigns leading to the 2010 midterm elections, especially as Virginia Attorney General Ken Cuccinelli mounts a lawsuit to halt the entire health overhaul. Cuccinelli is arguing that the requirement that all Americans purchase insurance is unconstitutional.
