L O S T. The High Price of Not Expanding Medicaid in Virginia *****

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1 L O S T Dollars Jobs Opportunities People The High Price of Not Expanding Medicaid in Virginia ***** Joel E. Miller Executive Director and Chief Executive Officer American Mental Health Counselors Association March 2014 Alexandria, Virginia

2 Summary of Key Findings Fiscal Benefits Due to the Medicaid Expansion for Virginia The Medicaid Expansion program would significantly reduce the number of uninsured people with mental illnesses that the state of Virginia provides care for, and save Virginia $324 million over the next 10 years due to the influx of new federal funds. If Virginia policymakers opt in to the Medicaid Expansion, it will add $1.2 billion in new economic activity by 2019, and would add 31,000 new jobs. If Virginia state legislators refuse to participate in the New Medicaid Expansion Program, they will be rejecting a powerful economic boost in the form of $14.6 billion in direct federal expenditures in the states borders. Virginia would also receive $40.3 million per year from in higher tax revenue from increased employment. Virginia would save $424 million in uncompensated hospital care costs through the Medicaid Expansion initiative from 2014 to Mental Health Investments Due to the New Medicaid Expansion Initiative Nearly 34,500 adults (34,466) who are uninsured in Virginia (not covered by a public or private health insurance program) with a serious mental illness (e.g., schizophrenia, bipolar disorder, major depression) are eligible for health insurance coverage under the Medicaid Expansion. Over 75,500 adults (75,232) who are uninsured in Virginia (not covered by a public or private health insurance program) who are in serious psychological distress (e.g., severe panic, anxiety, or mood disorders) are eligible for health insurance coverage under the Medicaid Expansion. Nearly 68,000 adults (67,820) who are uninsured in Virginia (not covered by a public or private health insurance program) with a substance use disorder (e.g., dependence or abuse can involve alcohol, cocaine, heroin, and many individuals have a co-occurring mental health condition such as major depression) are eligible for coverage under the Medicaid Expansion. Nearly 178,000 (177,518) uninsured adults in Virginia with a behavioral health condition (people with a serious mental illness, in serious psychological distress, or with a substance use disorder) are eligible for health insurance coverage under New Medicaid Expansion. The 178,000 uninsured adults in Virginia with a behavioral health condition represent 48 percent of the total adults 370,600 in the state who are eligible for coverage under the Medicaid Expansion. 1

3 INVESTING IN VIRGINIA S FISCAL HEALTH THROUGH THE NEW MEDICAID EXPANSION PROGRAM The New Medicaid Expansion Program offers Virginia an historic opportunity to improve the mental health, and extend the lives and productivity, of the residents while infusing billions of federal dollars into the state economy and creating large numbers of good jobs. Study after study has shown that by refusing to offer mental health care and health care coverage to lower-income Americans, governors and state lawmakers are depriving their people and their local governments of increased jobs and tax revenue. Hospitals are particularly likely to be disadvantaged by rejection of Medicaid expansion. Their current or traditional payments will fall while they remain obligated to cover the patients who remain uninsured because of counterproductive political decisions. Expanding Medicaid eligibility is the right and responsible choice. State leaders in the Virginia General Assembly, guided by partisan politics rather than by the evidence and simple arithmetic, pose a threat to the health and general wellbeing of their constituents, and the health of their economies, if they again vote against expanding the Medicaid program during the special legislative session. There are six major reasons from a financial perspective why Virginia should opt into the New Medicaid Expansion Program: 1. The new expansion would shift more of the cost of mental health services to the federal Medicaid program, therefore reducing state spending for these services. Expanding Medicaid and reducing the number of uninsured people with mental illnesses that the state provides care for and would save Virginia $324 million over the next 10 years. In addition, the expansion would be critical to addressing unmet mental health needs. 2. Many Virginia mental health providers have waiting lists for their services, especially for residential care and methadone treatment. Medicaid Expansion would free up capacity and funding for these and other services, that are successful in treating people with serious mental health conditions such as schizophrenia and bipolar disorder, and substance use disorders. 2

4 3. An independent analysis conducted by the Chmura Economics and Analytics, shows that if state policymakers opt in to the Medicaid Expansion, it will add $1.2 billion in new economic activity by The new coverage initiative also would add 31,000 new jobs by 2019 alone. All of this increased economic activity will be lost unless the state participates in the New Medicaid Expansion effort. 4. In addition to damaging the health and shortening the lives of large numbers of people in their states, Virginia state legislators who reject Medicaid funds are dismissing a powerful economic boost from $14.6 billion in direct federal expenditures in the states borders. 5. Virginia would also receive $40.3 million per year from in higher tax revenue from increased employment. 6. Another critical economic consideration Virginia is what is known as uncompensated care or services where providers receive no payment from individuals or payers for health care or mental health services rendered. Many hospitals provide care to large numbers of uninsured and lower-income patients who are unable to pay their bills. The national cost of uncompensated care for hospitals alone was more than $41 billion in Reducing uncompensated care by expanding health coverage to millions of Americans was a central goal of the Medicaid Expansion initiative. States finance a large amount of uncompensated care through avenues such as grants to hospitals and clinics and local and state taxpayer support of public hospitals. The Kaiser Family Foundation conservatively estimates that Medicaid Expansion would benefit state taxpayers by providing a 33 percent savings on their share of uncompensated care costs. That means that Virginia would save $424 million in uncompensated care costs through the Medicaid Expansion coverage initiative from 2014 to 2023, or over the next 10-year budget window. ***** Experts in fiscal policy have concluded that non-medicaid Expansion states like Virginia are missing out on billions of dollars in economic development, thousands of new jobs and higher tax revenue from increased employment opportunities from the trickle down or multiplier effect of the New Medicaid Expansion Program. It would be a win-win situation in terms of both state budget savings and a state-wide economic windfall by opting into the New Medicaid Expansion Program. 3

5 INVESTING IN MENTAL HEALTH THROUGH THE NEW MEDICAID EXPANSION PROGRAM What better way to dramatically reduce stigma, discrimination and outright rejection that have kept people with a mental illness from seeking needed care and help in Virginia, than opening up the Coverage Door to those with mental illness so it is treated like any other illness. That is exactly what the New Medicaid Expansion Program will do if Virginia participates in the health insurance initiative. The decision by state officials to not participate in the Medicaid Expansion means that the General Assembly will commit hundreds of thousands of its fellow citizens who are suffering with a mental illness as well as millions more with chronic or serious c onditions to poor health, more poverty, and more despair. The dream of receiving affordable health insurance and health care will be dashed. The statistics that follow and the map on page 7 demonstrate that the New Medicaid Expansion Program can have a profound and positive impact on uninsured people with mental health conditions. Helping Uninsured People with Serious Mental Illnesses 1. Nearly 34,500 adults ages (34,466) who are uninsured in Virginia (not covered by a public or private health insurance program) with a serious mental illness (e.g., schizophrenia, bipolar disorder, major depression) are eligible for health insurance coverage under the New Medicaid Expansion Program. 2. Nearly 65,000 (64,845) individuals who are uninsured in Virginia (not covered by a public or private health insurance program) with a serious mental illness (e.g., schizophrenia, bipolar disorder, major depression) are eligible for health insurance coverage under the New Medicaid Expansion Program and the New State Health Insurance Exchange. 3. Nearly 88,000 (87,698) individuals who are uninsured in Virginia (not covered by a public or private health insurance program) with a serious mental illness (e.g., schizophrenia, bipolar disorder, major depression) are eligible for health insurance coverage under the New Medicaid Expansion Program and the New State Health Insurance Exchange, and eligible for coverage under the Traditional State Medicaid Program. 4

6 Helping Uninsured People in Serious Psychological Distress 1. More than 75,500 (75,232) adults who are uninsured in Virginia (not covered by a public or private health insurance program) who are in serious psychological distress (e.g., severe panic, anxiety, or mood disorders) are eligible for health insurance coverage under the New Medicaid Expansion Program. 2. Over 155,000 (155,133) adults who are uninsured in Virginia (not covered by a public or private health insurance program) who are in serious psychological distress (e.g., severe panic, anxiety, or mood disorders) are eligible for health insurance coverage under the New Medicaid Expansion Program and the New State Health Insurance Exchange. 3. Nearly 213,000 (212,266) adults who are uninsured in Virginia (not covered by a public or private health insurance program) who are in serious psychological distress (e.g., severe panic, anxiety, or mood disorders) are eligible for health insurance coverage under the New Medicaid Expansion Program and the New State Health Insurance Exchange, and the Current State Medicaid Program. Helping Uninsured People with Substance Use Disorders 1. Nearly 68,000 (67,820) adults who are uninsured in Virginia (not covered by a public or private health insurance program) with a substance use disorder (e.g., dependence or abuse can involve alcohol, cocaine, heroin, and many individuals have a co-occurring mental health condition such as major depression or an anxiety disorder) are eligible for health insurance coverage under the New Medicaid Expansion Program. 2. Nearly 165,000 (164,367) adults who are uninsured in Virginia (not covered by a public or private health insurance program) with a substance use disorder (e.g., alcohol, cocaine, heroin and many individuals have a co-occurring mental health condition such as schizophrenia or an anxiety disorder) are eligible for health insurance coverage under the New Medicaid Expansion Program and the New State Health Insurance Exchange. 3. Nearly 182,000 (181,221) adults who are uninsured in Virginia (not covered by a public or private health insurance program) with a substance use disorder (e.g., alcohol, cocaine, heroin and many individuals have a co-occurring mental health condition such as schizophrenia or an anxiety disorder) are eligible for health insurance coverage under the New Medicaid Expansion Program and the New State Health Insurance Exchange, and eligible for coverage under the Traditional State Medicaid Program. 5

7 How It All Adds Up 1. Nearly 110,000 (109,698) uninsured adults in Virginia with a mental health condition (persons with either a serious mental illness or in serious psychological distress) are eligible for health insurance coverage under the New Medicaid Expansion Program. 2. Nearly 178,000 (177,518) uninsured adults in Virginia with a behavioral health condition (people with a serious mental illness, in serious psychological distress, or with a substance use disorder) are eligible for health insurance coverage under the New Medicaid Expansion Program. 3. The 178,000 uninsured adults in Virginia with a behavioral health condition represent 48 percent of the total adults 370,603 in the state who are eligible for coverage under the New Medicaid Expansion Program. 4. The nearly 300,000 uninsured adults with a mental health condition (persons with either a serious mental illness or in serious psychological distress) in Virginia represent 28 percent of the 1,072,419 uninsured adults eligible for coverage in the state under the three health insurance programs (Current Medicaid, New Medicaid, New Exchanges). 5. The nearly 481,500 uninsured adults with a behavioral health condition (people with a serious mental illness, in serious psychological distress, or with a substance use disorder) in Virginia represent 45 percent of the 1,072,419 uninsured adults eligible for coverage in the state under the three health insurance programs cited in #4 above. ***** The new Medicaid Expansion effort has the potential to afford people with mental health diagnoses greatly expanded access to mental health and substance use treatment in an integrated and community-based setting, with a person-centered treatment focus. Medicaid Expansion due to providing people with mental illness a consistent source of health coverage will lessen reliance on costly and traumatizing crisis and inpatient care, and transition people to community-based models of care. The New Medicaid Expansion Program also has the capacity to help states redirect funds from jails, prisons, and crisis-driven services, such as traditional homeless shelters and hospital emergency departments into community-based programs and evidence-based treatments. We can and must improve mental health services in Virginia; ensure quality, safety and adequate oversight; and improve access to recovery - based care. The new Medicaid expansion initiative is good for people with mental illness in Virginia and good for the state. 6

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