Lock - Box

Governor McAuliffe’s poor messaging and petulant behavior towards the House of Delegates assured defeat of Medicaid expansion this year. So it comes as no surprise that the Governor’s messaging has changed. During last week’s AP day, Secretary of Health & Human Resources Dr. Bill Hazel tried a different approach. According to the Times-Dispatch, Secretary Hazel argued that “[i]f Medicaid expansion began in Virginia on July 1, Virginia would take in more than $230 million in federal offsets that would alleviate 71 percent of the state’s $322 million budget gap….” In other words, Medicaid expansion will solve the Commonwealth’s budget woes. But you don’t have to look at the new argument too deeply to identify a fundamental problem with using Medicaid expansion to fill the budget deficit. We will let Secretary Hazel himself identify the flaw with his argument. Last year, Secretary Hazel gave a presentation to the Senate Finance Committee factually outlining the pros and cons of Medicaid expansion. In that presentation, he warned that if Virginia expanded Medicaid, the “[s]avings accrued during the first five years of the expansion should be protected and reinvested to improve the health delivery system.” In other words, any savings achieved in the early years of expansion would have to be put in a lockbox and used to reform Virginia’ health care system or Virginia could not afford the expansion.

Virginia has lots of experience with lockboxes. Even Governor McAuliffe recognizes the value and importance of them. Politifact Virginia has noted that “McAuliffe supports creating a lockbox to prevent the General Assembly from diverting transportation revenue to other programs.”

Of course, the media won’t ask the basic question of why the Governor supports a lockbox for transportation but not for Medicaid, especially when his own Secretary of Health has previously emphasized the need for a lockbox if Virginia expands Medicaid.

The answer is simple. The Governor believes in the age-old political maxim of never letting a crisis go to waste. In this case, it is a budget crisis.

But I don’t think conservatives in the House and Senate will fall for the Governor’s fools gold promise of avoiding budget cuts this year by bankrupting the Commonwealth in the future.