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Del. Ken Plum: The Chicken and the Egg

by Del. Ken Plum — November 5, 2015 at 3:00 pm 10 Comments

Del. Ken Plum/File photoThis is an opinion column by Del, Ken Plum (D), who represents Reston in Virginia’s House of Delegates. It does not represent Reston Now.

A chicken-or-egg kind of debate has been going on in Virginia recently as a result of a report from the Joint Legislative Audit and Review Commission (JLARC). The agency is charged by law with the responsibility of providing an annual report on the growth of state spending over the last 10 years while identifying the largest- and fastest-growing programs and functions in the budget.

The most recent report was for the period FY 2006 through FY 2015. Among its other findings was the fact that the Department of Medical Assistance Services (DMAS) has overtaken the Department of Education (DOE) as having the largest appropriation of any state agency. The appropriation for DMAS represents 18 percent of the total state budget with DOE being 15 percent, Virginia Department of Transportation at 10 percent, and all the other agencies of state government at under 10 percent each.

The largest program increase in total appropriations from FY 2006 to FY 2015 was in the area of medical program services (Medicaid) from $4,672.8 million to $8,148.6, an increase of 74 percent. Some opponents of an expansion of Medicaid have focused on this number as being a reason to not expand Medicaid for presumably it would cost too much.

Fortunately, the Commonwealth Institute for Fiscal Analysis has done some research that puts the increase in context. As the Institute points out, “the growth occurred largely during the worst and most prolonged economic recession since the Great Depression and then a sluggish recovery made worse by federal sequestration.

Most recently, Virginia ranked 48th nationally in economic growth. When you lose your job, you lose your health coverage if you were lucky enough to have it in the first place. At the same time, the number of Virginians 65 years and older grew more than three times as much as the overall population resulting in a 30 percent increase in enrollment.”

Beyond these external factors affecting Medicaid costs, state legislators added more than 4,300 waiver slots over the past 10 years for long-term care services for people who are intellectually and developmentally disabled.

These waivers that are critical to the individuals and families who need them are among the most expensive of medical services. An intellectual disability waiver costs about $71,000 per person per year, and a developmental disability waiver costs nearly $33,000 per person per year. The Institute found that last year alone the waivers added $285 million to the budget. Waivers are not limited to persons of low incomes as the rest of Medicaid programs are.

Is it then the chicken or the egg that came first? Did the availability of medical services run up the cost of Medicaid or was it the growing population of older persons and the extension of services to the most needy that added to the cost? In either case, does it not make sense to use 100 percent federal dollars to meet the needs of the working poor and save the 350 million state dollars that are currently appropriated for the indigent? People who need health care come first making an expansion of Medicaid essential.

  • Ming the Merciless

    Comrade Ken’s infallible solution to the runaway growth in government spending is… more government spending.

    With that kind of genius, it is no wonder nobody dares to oppose him when he runs for re-election.

  • meh

    big government social programs keep failing, the biggest of them all social security is bankrupt and wont be around for most of us. Stop asking us to give you more money, we need to save up for our own retirement, we cant count on the government. For all the baby boomers who vote democrat, thanks for leaving us debt ridden failed state with no borders, you did a great job ruining this country.

    • east297

      Am 77 yrs but totally agree with you!

    • Guest

      You couldn’t be more wrong. There are a number of financially responsible fixes available ( if only Congress would put aside its partisan squabbling) which would insure that SS will be around for years to come, such as means testing, or a realignment of benefits and SS taxpayer contributions (in any number of reasonable ways) which are not being implemented by an ideologically divided Congress, all of which would go far to help resolve any future SS funding issues. But it is NOT going “bankrupt” as you use that word (and you know that, too). Privatization is NOT the answer either, as Bush 43 and his Wall Street buddies discovered to his everlasting dismay.

  • Really?

    Stop giving away America. The democratic solution only works for those that don’t want to work. Ken – ditch your hybrid for a day and ride the RIBS2 and tell me what you think about Section 8 housing.

  • Robin Williams

    80% of health care dollars are spent on seniors.

    A 50 year old friend, a staunch republican, was recently diagnosed with fatigue and damage to the central nervous system. Unable to work she moved to another state.

    She is now advocating Obama care and all its benefits for the un(der)insured. Lessons learned, it’s ok to be Republican as long as it doesn’t hurt your wallet.

    Nuff said.

  • Ming the Merciless

    Sally Pipes has a fine answer to Ken:

    http://www.forbes.com/sites/sallypipes/2015/07/27/heres-why-states-must-resist-the-temptation-to-expand-medicaid/

    Obamacare’s Medicaid expansion is saddling taxpayers with billions in new health costs — much of which the states will eventually have to shoulder on their own. The program’s new beneficiaries, meanwhile, may have coverage. But they face interminable waits to actually find doctors and get care. And that care is often of low-quality.

    Costs under the expansion are higher than expected. Earlier this month, the Centers for Medicare and Medicaid Services observed that treating enrollees in the states that expanded cost about $1,000 more than anticipated.

    Enrollment is also far above what most states had planned. That’s putting pressure on state budgets.

    Consider Kentucky. Some 311,000 people enrolled last year — double expectations.
    The Bluegrass State didn’t think that many would sign up through 2021. As a result, it has doubled its Medicaid cost estimate for 2017.

    Other states’ experiences have been similar. Michigan’s Medicaid costs have climbed 50 percent. Ohio’s have more than doubled. Illinois now figures its Medicaid expansion will add $2 billion to its costs from 2017 to 2020 — almost four times its original predictions.

    All that extra spending was supposed to reduce costs for providers, as they’d no longer have to eat the cost of treating low-income uninsured patients in expensive emergency rooms.

    Things haven’t worked out that way. A Moody’s report shows that nonprofit hospitals in states that expanded Medicaid didn’t fare any better financially than those in states that rejected expansion. Southern Illinois Healthcare, for example, saw its unpaid bills drop by $9 million. Yet because of the surge in Medicaid costs, the hospital still lost $5 million.

  • east297

    Whatcha been doing for the last how many years have you been representing Reston? Uh…NOTHING!!!

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