Nearly 130,000 West Virginia parents and other adults could get health insurance through an expansion of Medicaid to allow more working families to participate, as outlined in the law. Expansion promises to lower costs for hospitals that treat large numbers of patients without insurance, costs which now add up to more than $700 million in West Virginia. This, in turn, will help employers and individuals who pay for private coverage, because some of those costs are now passed on to insured patients in the form of higher premiums, $1,000 higher for a West Virginia family, on average. Read PDF of report.
Expansion also is a great bargain for West Virginia. Federal dollars will cover the entire cost of the expansion for the first three years, and no less than 90 percent after that. And the state likely will save enough money in other ways to more than cover its costs.
The millions of new federal dollars flowing to the state will stimulate the economy and create new jobs. All of this adds up to a big return for West Virginia, its people and its economy, at minimal cost.
Medicaid is a federal/state partnership offering health and long-term care insurance to more than 400,000 West Virginians, mostly children, pregnant women, people with disabilities and the elderly. It also covers parents with very low incomes. For example, a family of three cannot earn more than $7,000 annually to qualify – that is 35 percent of the federal poverty line. Parents who earn more than that are not eligible for Medicaid, even though they may be unable to afford any other kind of insurance. Low-income adults without dependent children are not eligible for Medicaid unless they are disabled or over age 65.
Under health reform, states can expand Medicaid to all families and adults without dependent children earning up to 138 percent of the federal poverty level – $15,415 for an individual and $26,344 for a family of three. In West Virginia, almost 130,000 uninsured parents and other adults would become eligible for Medicaid in 2014. The asset test under Medicaid will be eliminated under health reform.
Uninsured West Virginians eligible for Medicaid under an expansion tend to be very poor earning less than 50 percent of the poverty level (49%). Most (70%) have no dependent children and one in four is age 19 – 24. Almost all are white and most work in the service and agriculture industry.
The Medicaid expansion will improve the health of West Virginians who gain insurance. People without health insurance get less care and are sick more often than people with insurance. About 210 working-age West Virginians die every year because they have no health insurance. A recent study by the Harvard School of Public Health that examined three states that chose to expand Medicaid 10 years ago found that increased eligibility in Medicaid cut the number of uninsured by 15 percent and reduced the overall death rate among adults by six percent.
West Virginians who gain health insurance will be able to get preventive care that can help them avoid future health problems, or identify and treat existing conditions early, while they are less costly to treat. A Medicaid expansion may also help West Virginia address its enormous substance abuse problem by providing a source of payment for substance abuse and mental health treatment.
The expansion will also improve the economic security of West Virginia families, both those who gain health insurance and those who already have it. Families that gain health insurance will no longer have to fear that a serious illness or accident will lead to financial ruin. And, families that already have insurance will save money. That’s because the expansion promises to lower costs for hospitals that treat large numbers of patients without insurance. Right now, hospitals and other health care providers pass those costs on to patients with insurance through higher premiums. Highmark Blue Cross, Blue Shield of West Virginia estimates that adds $1,000 to a family policy.
Expanding Medicaid and implementing other elements of health reforms will save employers and families hundreds of millions in health care costs.
Expanding Medicaid will cost the state a modest amount that likely will be outweighed by savings in other budget areas.
Under health reform, the federal government will cover the entire cost of expanding Medicaid for the first three years (2014-2016); the federal contribution then will decline gradually to 90 percent on a permanent basis. From 2014 to 2022, the federal government will cover 93 percent of the total costs of Medicaid expansion nationally.
In the first six years of the Medicaid expansion, West Virginia is expected to spend between $163 million and $217 million to cover newly enrolled adults. That’s just 2.4 percent to 3.2 percent more than what it would have spent without the expansion.
Some people who are already eligible for Medicaid but not yet enrolled are likely to do so after 2014. However, because Medicaid eligibility in West Virginia is so strict, few people are likely to fall into this category. For those people, the federal government will pay the share of costs they currently cover for Medicaid enrollees, which tends to range from 73 to 76 percent most years. But, West Virginia can’t avoid the bulk of these costs by not expanding Medicaid, as other changes under health reform, in particular the mandate for all West Virginians to have health insurance, will encourage people who are already eligible to enroll regardless of the Medicaid expansion. Savings in other areas and additional tax dollars that will flow to the state from increased health care business activity could easily offset West Virginia’s increased Medicaid costs under the expansion.
Currently, federal, state and local tax dollars pay for 75 percent of the health care for patients without insurance.11 Health care providers also cover some of these costs – and charge higher prices to insured customers in order to recover some of the loss, as discussed above. Without health reform, the cost of such care in West Virginia is expected to increase by as much as 107 percent by 2019.12 Expansion of Medicaid will also decrease state costs for mental health services for the uninsured and the cost of providing substance abuse treatment.
As health providers and families benefit, so, too, will West Virginia’s economy. The influx of federal dollars for the Medicaid expansion, estimated to be more than $3.7 billion over six years, will increase the volume of health care goods and services bought within West Virginia. With more revenue, health care companies and workers can buy other goods and services, much of it within the state’s borders.
New jobs, higher wages and increased business activity also mean more state revenue from income taxes, sales taxes, and other fees.
By any measure, expanding Medicaid will provide enormous benefits to the people of West Virginia and its economy, at a relatively small cost to the state. More West Virginians will have access to preventive and primary care, so health problems can be avoided or identified and treated at an early, less costly stage. No one will have to worry that a medical emergency will force them into bankruptcy. And families with insurance won’t face higher premiums because they shoulder part of the costs of providing care to people without insurance.
Expanding Medicaid is also the right choice for West Virginia’s economy. Healthy families and a more productive workforce will help strengthen the economy. Hospitals and employers will see their costs fall as the number of West Virginians without insurance drops. And new federal dollars will flow into the West Virginia economy.
The estimates on newly eligible Medicaid enrollees is the number expected to be enrolled by 2019. Estimates on newly enrolled eligible varies by anticipated outreach efforts and insurance status. With enhanced outreach, the Kaiser Commission on Medicaid and the Uninsured estimates that 129,185 uninsured West Virginians will be enrolled in Medicaid. As many as 156,582 will be newly enrolled in 2019 depending on other factors. http://www.kff.org/healthreform/upload/medicaid-coverage-and-spending-in-health-reform-national-and-state-by-state-results-for-adults-at-or-below-133-fpl.pdf.
Lindsey Dunn, West Virginia Hospitals Provide $721 million in Uncompensated Care, Becker’s Hospital Review, May 4, 2011. Retrieved from http://www.beckershospitalreview.com/hospital-management-administration/west-virginia-hospitals-provide-721m-in-uncompensated-care.html.
See Renate Pore, Medicaid Made Simple, West Virginia Center on Budget and Policy, September 2011, for a detailed description of eligibility for West Virginia Medicaid. Retrieved from /downloads/WVCBP_Medicaid_Made_Simple101211.pdf.
Kaiser Commission on Medicaid and the Uninsured.
John Z. Ayanian, MD, MPP; Joel S. Weissman, PhD; Eric C. Schneider, MD, MSc; Jack A. Ginsburg, MPE; Alan M. Zaslavsky, PhD, Unmet Health Needs of Uninsured Adults in the United States, JAMA. 2000;284(16):2061-2069. Retrieved from http://jama.jamanetwork.com/article.aspx?articleid=193207.
Families USA, Dying for Coverage in West Virginia, March 2008. Retrieved from http://familiesusa2.org/assets/pdfs/dying-for-coverage/west-virginia.pdf.
Benjamin D. Sommers, Katherine Baicker, and Arnold M. Epstein, “Mortality and Access to Care among Adults after State Medicaid Expansion,” New England Journal of Medicine, September 13, 2012. Retrieved from http://www.nejm.org/doi/full/10.1056/NEJMsa1202099.
Statement in 2009 by Fred Early, CEO, of Anthem Blue Cross, Blue Shield of West Virginia.
CCRC Actuaries, Health Care Financing in the State of West Virginia, An Analysis and Projection of the Current System and Potential Transformations, West Virginia Health Care Authority, March 2009. Retrieved from http://www.hcawv.org/Support/Health%20Care%20Financing%20in%20the%20State%20of%20West%20Virginia%20DRAFT%20v3.pdf.
Center on Budget and Policy Priorities, How Would the Medicaid Expansion Affect West Virginia. http://www.cbpp.org/files/healthtoolkit2012/WestVirginia.pdf.
John Holahan and Bowen Garrett, The Cost of Uncompensated Care With and Without Health Reform, The Urban Institute, March 2010.
Ibid.
Stan Dorn, Considerations in Assessing State-Specific Fiscal Effects of the ACA;s Medicaid Expansion., Urban Institute Health Policy Center, September 2012, Page 7.
