What Exactly is Bill Howell’s Magic Alternative for Medicaid Expansion?

Yesterday, Speaker William J. Howell published an op-ed in the Free Lance Star titled “A Time for Magical Thinking/Responsible Alternative Must be Found to Expanding Medicaid.” (available here). The title seems promising. We know that Speaker Howell is against expansion but at least he is talking alternatives now, right? Well, maybe not so much.  

The article starts out promisingly enough. The Speaker says that:

Virginia should explore an alternative approach to covering those in the Obamacare coverage gap.

That would seem to concede that something must be done to address the dilemma facing this population. Namely, that these individuals make too much to qualify for Medicaid as traditionally defined but too little to qualify for subsidies on the exchanges.  

But then the Speaker outlines his conditions for any alternative plan.

First, it shouldn’t rely on federal dollars. Any plan that relies on federal money not only leaves Virginia taxpayers on the hook once that money goes away, it also contributes to the national debt. An alternative plan should and can be paid for using the savings from reforms and a comprehensive, independent audit of Medicaid.

Second, it should provide targeted coverage to those who truly need it without growing the size of government. Medicaid is meant to serve the truly needy-the working poor, single moms and children. An alternative plan should help those who need it the most.

Finally, it should be based on principles utilized in the private market. The plan should emphasize cost sharing, health and wellness, and competition. These principles keep costs down and improve the quality of care.

This is where things get tricky.  Obviously, the Speaker doesn’t want to rely on the funds available through the federal expansion. Ok. But then where does the money come from? Is the Speaker amenable to raising taxes? Cuts in other areas like education or public safety? Or are we expected to believe that reforms to the existing Medicaid program will deliver the money?

And, if we do have another source of revenue, where is the logic in turning down the federal money — money that comes from Virginia taxpayers? Even if we don’t believe that the federal revenue stream will be permanent, what is the harm in accepting it temporarily while we find the other funds that the Speaker suggests are available, whatever those might be?  

But let’s be generous for a moment.  This is an op-ed and not a policy paper.  Maybe these funds are available somewhere.  And maybe there is a perfectly logical reason for letting another state benefit from the tax dollars of Virginia citizens. What do Speaker Howell’s other conditions tell us about his alternative?  

Well, and this might just be the cold weather speaking, I actually have no idea what the remaining conditions are supposed to mean. Any expansion would obviously be targeted — we are talking about a narrow slice of the population that falls into this gap. How could it be more targeted? As for private market principles, that sounds fine enough. But the Medicaid waiver process already gives states significant flexibility in the design of their programs. There is no reason Virginia couldn’t develop an expansion system that relied on private market principles.

The only firm conclusion one can draw from all of this is that the Speaker knew what he was doing when he selected the title.  One needs quite a bit of “magical thinking” to view this as a serious alternative proposal.