Affordable Care Act (ACA) vs. Medicaid Expansion

Culpeper Star Exponent

Business Monday

February 17, 2014

Jim Charapich

Affordable Care Act (ACA) vs. Medicaid Expansion. In some circles the two are one issue. In others, there is good reason to see them as separate issues. The ACA, as with many innovations, is certainly a disruption to the status quo. There is no doubt that Americans are seeing a shift in the way we access health care.

The impact of the 30 hour work week threshold has yet to be fully seen. In addition, the impact of access to affordable healthcare has the potential to disrupt the way that workers see employment. Businesses have had the luxury of retaining employees through the golden handcuffs of access to healthcare. Now, with the limits on exclusions due to preexisting conditions, employees may be less likely to stay in employment environments for the purpose of sustaining access to healthcare. Employers will need to reevaluate their compensation packages with these dynamics in mind. In addition, employers will likely need to plan for the unintended consequence of more turnover as the economy improves and unemployment numbers drop. In reconciling the impact of ACA with business operations, it is clear that business will need to adapt to the new law. Hoping for the law to be repealed seems to be a futile use of energy. It is time to learn, adapt, and move forward, while shaping the ACA Law for it's best outcome.

With regard to Medicaid Expansion, there are those that would stand and make statements about increases in their premiums as if they relate primarily to the Medicaid Expansion issue. The increase in premiums is the very reason Medicaid Expansion makes sense. Much of the premium increases are related to ACA Federal taxes imposed on Americans - Businesses and Individuals. In Virginia, we have seen some in the General Assembly call for delaying the Expansion of Medicaid in hopes of more research on reforming Medicaid. There is no doubt that Medicaid needs reform, and most agree that reform is necessary.

However, the real issue is that Virginians are paying the Federal ACA related taxes as of January 1, 2014. According to Lee Kirk, President of the Culpeper Regional Health System, Medicaid Expansion would bring $5,000,000 per day back into Virginia. The impact of not doing this to the Culpeper Regional Health System is approximately $2,000,000 this year. What will the impact of this drop in revenue have on the region? When tourists spend a dollar in Culpeper, an estimate is that the dollar circulates 5 times, meaning $1 equals $5. So what happens when $2,000,000 of revenue disappears? Even at a two times impact, would that be a $4,000,000 impact in our local economy? To put this in context, the ever growing Town budget is now around $15,000,000.

The Virginia Chamber and a significant number of chambers across the Commonwealth have called for support of Medicaid Expansion with concurrent reform in order to recover the $5,000,000 per day back to Virginians. What would this $5,000,000 be used for? Access to healthcare for the workers that cannot access healthcare through Medicaid currently. Some of these are the front line workers that serve us every day. These are the retail clerks, restaurant workers, and other direct labor professionals that are unable to afford preventative health coverage. Their option today relegates them to wait for crisis healthcare in an emergency room shifting the cost to the rest that pay for this in their current premiums.

The Chambers of Commerce and other Professional Business Organizations have requested the General Assembly move forward on Medicaid Expansion with concurrent reform. The need for action is now. The wait and see discussion is costing Virginia and our local economy every day. Will other States that have chosen to access Federal tax dollars to upgrade and improve their workforce through Medicaid Expansion have a strategic advantage over Virginia? Will this challenge our Commonwealth status as “The Best State to do Business”? If progress on this issue hinges on “trust in the Federal Government” then we have larger problems than this issue. Today, Virginia has an opportunity to upgrade our workforce by delivering a healthy, ready to go workforce for employers. It is time to bring Virginia dollars back to Virginia and put them to work in order to grow our economy. Our success in the global marketplace will depend on the quality of our workforce.