Medicaid expansion could give Virginia flexibility, official says

RICHMOND — Virginia is in a strong bargaining position to get the flexibility it wants if it opts to expand Medicaid, the government health insurance program for the poor and disabled, the state’s top health official said Monday.

And the state already has made much progress reforming its Medicaid services on the lines that this year’s budget compromise on expansion calls for, said the chairman of the legislative panel that will decide whether to expand Medicaid.

But even if the Medicaid Innovation and Reform Commission decides to expand Medicaid — by no means a certainty — it is unlikely that all the people who would be eligible if the state opts to expand Medicaid will actually get the coverage by the start of next year, state Sen. Emmett Hanger, R-Augusta County , the panel’s chairman, added.

Virginia is one of 20 states that are still weighing whether to expand Medicaid, using federal funds through the Affordable Care Act.

About 400,000 Virginians could be eligible for coverage under an expanded Medicaid.

But costs for the joint federal-state coverage have ballooned in recent years, and both the governor and the legislature worry that allowing more people into the system could be a budget breaker. They want a series of reforms to the system and a promise from Washington that the state will have more flexibility in administering the program.

“There’s a unique opportunity Virginia has. The [Obama] administration is eager to see Virginia expand and is willing to grant concessions,” Secretary of Health and Human Resources Bill Hazel told the Medicaid reform panel at its first meeting Monday.

Virginia’s biggest challenge is that it has already squeezed large savings out of the system, he said.

Unlike Wisconsin, which is trying to rein in Medicaid spending by cutting the number of people eligible for the program, Virginia is already close to the minimum levels the federal government allows.

Unlike Louisiana, which seeks to save money by using managed care plans, Virginia already has 70 percent of its Medicaid recipients signed up for managed care, which controls costs by limiting who people see and often requires approval before people get particular treatments.

Getting the rest into managed care — mainly people who need mental health care and those living in long-term care facilities — is one of the state’s main reform goals.

One major step is a new coordinated care program for nearly 79,000 Virginians who are covered by both Medicare and Medicaid. Medicaid pays for these beneficiaries’ Medicare premiums as well as for some care that Medicare won’t cover.

Washington last month approved a pilot for the program, which will include more than 12,700 people in Western Virginia, in an area stretching from Highland County to the North Carolina line and from Wythe County to Bedford County.

The state Department of Medical Assistance Services, which runs Medicaid, expects to announce the health plans that will run the program in about two weeks, director Cindi Jones said.

The department also expects to move about 12,000 children in foster care into Medicaid managed care plans this fall.

In December, a new behavioral health services administrator will begin operating a centralized call center and processing claims in a first step to the difficult task of applying managed care systems to mental health care, Jones said.

She said a new contract with Medicaid managed care plans and a new system for handling applications for coverage should also save money and streamline delivery of care.

“Obviously you all are moving this train on down the line,” Hanger said. “I can already see tangible results.”

Hanger said he hopes the commission will make a decision on whether to expand Medicaid by December, but added that he expects it to continue for some years to monitor and promote reform.

Three of the commission’s five state senators and three of its five delegates would have to agree before the state could expand Medicaid.

The vice chairman, Del. Steve Landes, R-Augusta County , said he remains concerned about funding for the long term. The federal government has said it would pay for all the costs of the expansion for three years and gradually phase in a state contribution of 10 percent by 2022.

“Our federal government is broke,” Landes said. “They say they are going to find funds, but some of us have the concern whether those funds are going to be there.”

About 50 opponents of the Affordable Care Act, mostly sporting green T-shirts distributed by Americans for Prosperity, joined the usual crowd of health care and insurance lobbyists at the commission hearing. At one point, they erupted into chants of “kill the bill, kill the bill,” but quieted when Hanger said that such outbursts were not the way things are done at the Capitol.

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