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VA Lawmakers Revisit Medicaid Expansion Debate

PHOTO: Michael Cassidy, who heads The Commonwealth Institute for Fiscal Analysis, says the possibility of expanding Virginia's Medicaid program is once again before state legislators because it offers a lot of federal money that could help close the state's budget gap. Photo courtesy of The Commonwealth Institute.
PHOTO: Michael Cassidy, who heads The Commonwealth Institute for Fiscal Analysis, says the possibility of expanding Virginia's Medicaid program is once again before state legislators because it offers a lot of federal money that could help close the state's budget gap. Photo courtesy of The Commonwealth Institute.
December 29, 2014

RICHMOND, Va. - Although the Republican leadership in the General Assembly is frowning on it, Democrats and the governor are reopening Virginia's debate on expanding Medicaid. One reason it won't go away is because federal money available to close a big gap in Virginia's healthcare coverage would also close a big gap in the state budget.

As Michael Cassidy, president with The Commonwealth Institute puts it, the state is leaving federal money on the table. Funds he says Congress or the other states will gladly spend.

"Virginians are paying all of those taxes in the other parts of the Affordable Care Act," says Cassidy. "Our state lawmakers are just opting not to bring some of that back, drawing down the federal money that's available to cover more Virginians."

Governor Terry McAuliffe's budget plan counts on the more than $200 million in new federal Medicaid funding to close a budget gap of more than $300 million. But expanding Medicaid under Obamacare is very unpopular with much of the Republican majority in the Legislature.

Critics of expansion say they don't want to commit to enlarging a state program and risk having federal funding cut in the future. But supporters point out the state could pass a so-called circuit breaker, withdrawing expansion if the federal money goes away.

Cassidy says even though Congress has been fighting fierce battles over the budget, it's never shown any appetite for cutting Medicaid funds.

"In all of these rounds of federal deficit-reduction talks and agreements we've had," he says. "None of them have monkeyed with the federal match rate for Medicaid expansion."

According to Cassidy, Medicaid has always been better at controlling expenses than private insurance, with much lower overhead and administrative costs. He adds one irony is that expanding Medicaid would save Virginia a lot of money in other parts of the state budget. He points out the uninsured end up using other types of expensive, state-supported care at such places as clinics, hospitals and jails.

"There's a wide array of services that the state currently pays," he says. "If we went ahead and closed the coverage gap, then the state would get very significant state budget savings."

Dan Heyman, Public News Service - VA