Wagner: Help 2 million Virginians with tax credit, not just 400,000 through Medicaid expansion alone

Ed. — State Sen. Frank Wagner, R-Virginia Beach, signaled support for a state budget that includes Medicaid expansion with the following statement on Friday, April 6, which has been edited for style and clarity. He suggested including a tax credit for insured working class families struggling to pay health care costs. 


As we in the state legislature close in on the budget deal, the significant obstacle that remains is whether or not to expand Medicaid to include up to an estimated 400,000 Virginians, most of whom are currently without health insurance.

Traditionally, Medicaid has been an entitlement program providing free health care to the neediest individuals who are aged, blind, disabled, pregnant women or children. The expansion of Medicaid under the Affordable Care Act would cover everyone with incomes below 138 percent of the poverty level – $16,753 for a single individual and $34,638 for a family of four – including individuals who are considered to be the working poor.

But what about those who earn income above the 138 percent of poverty? Do we do nothing for these hard working Virginians? They struggle every day to cover their health insurance, deductibles and copayments while trying to meet the rest of their living expenses.

I believe we can and should help both groups of Virginians.

The House of Delegates’ budget included $307 million in provider assessment fees. These fees will be paid by the hospitals. Because 400,000 uninsured Virginians will now be eligible for coverage, the hospitals will now be reimbursed for healthcare services they currently provide for little to no payment.

Many hospitals, for the most part, have agreed to this fee. While most hospitals in Virginia are “nonprofit” businesses, these not-for-profit hospitals are some of the most profitable companies in Virginia.

Based upon their filings with the Virginia Health Information System, the combined profits of the five largest hospital systems in Virginia were over $1.1 billion in 2016, and this was without any new money flowing from Medicaid expansion. Clearly, $307 million in new provider assessments will not harm the hospitals’ financial posture.

What if as part of Medicaid expansion we took $150 million of the $307 million in provider assessment fees and put that money back in the pockets of those hardworking lower and middle income families who have insurance but are struggling to pay their copayments, premiums and deductibles?

Instead of helping 400,000 Virginians, let’s help 2 million Virginians.

Expand Medicaid and cut taxes on working families? It can be done.

Presently, there are 660,000 tax returns filed for income between $30,000 and $50,000 adjusted gross income a year in Virginia. If we provided a tax credit of $250, the total cost to the state would be $165 million.

However, the $307 million dollars in new provider assessment fees can be used to offset the tax credit and still leave more than $140 million for teacher pay raises, state employee raises and aid to higher education.

Obviously, these are tax credits in their most simplistic form. A sliding scale of income levels could be built in to provide more relief to the lower income insured and a little less relief to the higher incomes.

If Virginia expands Medicaid, we want a system that encourages Virginians to improve their livelihood. This is why a firm work requirement for able-bodied adult Medicaid recipients must be incorporated into any expansion plan. No one should be allowed to sit around and collect benefits while other Virginians work to pay for those benefits.

We must also require the Virginia Department of Medical Assistance Services to seek federal waivers to eliminate the Medicaid cliff and allow the working poor to continue to improve their position in life without losing their benefits. Rather, they can exceed the poverty threshold while starting to pay for some of their healthcare costs.

But we must do more to help working families find affordable health insurance.

This year, I carried legislation to allow associations such as the Virginia Chamber of Commerce to put together health insurance plans to offer to all member companies and their employees. This will create a sizeable pool in order to lower health insurance premiums for participating Virginians across the state.

Some of my other colleagues in the Senate proposed other bills to promote short-term insurance and catastrophic health insurance policies as cheaper alternatives than those being offered currently on the federal marketplace. These actions were also part of the effort to provide Virginians with more options for affordable coverage.

The tax credit that I am proposing will provide relief for those who have insurance but are struggling the most to cover their premiums, copayments and deductibles.

Affordable health care is an important issue confronting Virginia families. The programs outlined begin to make an effort to reduce costs for health insurance for Virginia families and ensure all Virginians are covered by health insurance.

© 2018 Pungo Publishing Co., LLC

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