VHHA Statement on Governor McAuliffe’s Medicaid Expansion Proposal

December 17, 2014

RICHMOND – The Virginia Hospital & Healthcare Association appreciates the Governor’s tireless efforts to reduce the number of uninsured Virginians and to address the difficult financial challenges facing Virginia’s hospitals. Closing the coverage gap by providing insurance to over 200,000 working Virginians including 25,000 veterans is essential to creating better health outcomes for our citizens and to improving the overall health of our state.  Over a third of Virginia’s hospitals are currently operating in the red, cuts to Medicare and other health programs continue to grow each year, and the picture remains grim for 2015.*

Hospital operating margin data compiled by Virginia Health Information (VHI) shows that 31 of the 88 Virginia hospitals reporting information had a negative operating margin last year. Of the 38 rural hospitals tracked by VHI, 17 hospitals had a negative operating margin.  Most troubling is that this data was reported prior to the significant provider payment reductions under the Affordable Care Act (ACA). Combined cuts to Virginia health care providers imposed by the ACA, sequestration under the Budget Control Act of 2011 and the American Taxpayer Relief Act were $80 million in 2013; these cuts increased to $317 million in 2014. In 2015 and 2016, cuts are estimated to escalate to $448 million and $507 million, respectively.   Our hospitals cannot continue to face these cuts, while also providing over $600 million per year in indigent care, supporting medical education and maintaining a full range of services at every facility.

Across America, many Republican Governors and legislators have implemented or are actively considering innovative, fiscally responsible proposals to close the coverage gap and achieve other desired public policy goals.  In fact, just a few days ago the chairman of the Republican Governor’s Association, Bill Haslam from neighboring Tennessee, announced his proposal to take advantage of additional Medicaid funding.  VHHA and its members urge our elected leaders in Richmond to examine the Governor’s proposal carefully and come together to find an innovative, bipartisan and fiscally prudent path forward.

* See: Ratings agencies are giving the healthcare and hospital sector negative ratings for 2015 in part because of uncertainty with ACA implementation, Reuters reports: http://reut.rs/1J1mSWh

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About VHHA

The Virginia Hospital & Healthcare Association is an alliance of 110 hospitals and 35 health delivery systems that develops and advocates for sound health care policy in the Commonwealth.  Its vision is to achieve excellence in both health care and health.