Medicaid is Crowding-Out Free Clinics

For several years I have been a member of a board for a free clinic, and during my time as a member we have persevered through a number of legislative changes, including the federal Affordable Care Act, or more popularly referred to as “ObamaCare.”  Last week I learned that our free clinic, along with other free clinics across Virginia, will be experiencing a sharp decline in the number of patients as a result of Medicaid expansion in Virginia. In fact, some clinics could experience a reduction in patients of up to 80%.

What’s going on is that Medicaid expansion is crowding-out the market for free and charitable clinics by qualifying more patients for a government-run medical insurance program.

In May 2018, Virginia lawmakers passed a budget that expanded Medicaid starting in January 2019, adding an estimated 400,000 new patients to the Medicaid rolls.  The expansion will provide government sponsored health insurance to Virginians with a household income of up to 138% of the poverty level, which equates to roughly $16,800 for an individual and $28,700 for a family of three this year.

Prior to Medicaid expansion, many low-income, uninsured Virginians relied on the medical services provided by volunteer physicians, nurses, dentists and other health professionals at numerous free and charitable clinics across the state.  They build relationships with patients and provide comfort and hope when they feel like there is no other place to go for help.  Free clinics have also become a valuable place for health professionals to apply their skills and train medical and dental students.  They are indeed one of the cornerstones of a caring and charitable society, and without them some of the most disadvantaged people suffer.

Virginia has found free medical clinics to be so valuable to our communities, that it has appropriated close to $6 million to support their mission.

Now that Virginia has expanded Medicaid, free medical clinics from around the state will have to decide if they want to expand their operations and become providers starting January 1, 2019.  But becoming a Medicaid provider is not an easy process, and the free clinics will need to decide if they should spend the money and time to satisfy program requirements or cut ties with long-time patients.

This is the direct result of big government.

Ronald Reagan famously stated: “I hope we once again have reminded people that man is not free unless government is limited. There's a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty contracts.”

The Family Foundation consistently warned that government expansion of Medicaid would increase in demand and cost.  But it is also clear now that government expansion of Medicaid is crowding-out charitable and nonprofit organizations currently providing the same service.  As more Medicaid eligible patients register, the less patients that free and charitable clinics will have to serve. And without a steady number of patients to serve, free medical clinics will ultimately experience a decline in state and private funding.   

According to the Virginia Association of Free and Charitable Clinics, between 90,000 to 100,000 people whose incomes fall between 139 percent and 200 percent of the Federal Poverty Level will not qualify for Medicaid, which means there will still be a need for free clinics.  But only time will tell if big government will encroach upon the free clinic market again to provide more government funded health care.