Boosted by expansion, Medicaid enrollment soared to more than half a million Virginians during the pandemic

By: - July 6, 2021 12:03 am

State social services workers signed up homeless residents for Medicaid at a resource fair in Richmond in early November. (Ned Oliver/ Virginia Mercury)

For years, Debbie Oswalt collected stories of Virginians who died before they could access the right medical care. 

As executive director of the Virginia Health Care Foundation, which funds the state’s network of free clinics and community health centers, she knew firsthand how limited access could be for patients without insurance. One of her worst memories was supposed to be a success for the foundation. A young mother with rectal bleeding had come Oswalt’s way after being denied screening by at least two hospitals.

The woman was finally referred to a community health center in Caroline County and screened positive for rectal cancer. A nurse practitioner arranged for surgery at a local hospital, and Oswalt planned to include the story in the foundation’s year-end report. But the woman died before she went in for treatment, leaving behind two young sons.

“It took months just for her to be referred somewhere,” Oswalt said. “That wouldn’t happen now.” The woman was one of roughly 400,000 uninsured Virginians eligible for health care through Medicaid expansion.

Just over three years after Virginia’s Republican-controlled legislature voted to widen the safety net program — breaking years of resistance — both legislators and advocates say the COVID-19 pandemic should eliminate any lingering doubt about the need. In March of 2020, just six days before Virginia recorded its first case of the virus, enrollment numbers stood at 394,372. In less than a year, they skyrocketed by nearly 40 percent, with more than 550,000 Virginians enrolled by the end of May.

Gov. Ralph Northam at a Medicaid enrollment announcement in 2018. (Katie O’Connor/Virginia Mercury)

A few factors have contributed to the spike, which exceeded even the most optimistic projections, said Ellen Montz, deputy director and chief economist for the Virginia Department of Medical Assistance Services. One was the increased “maintenance of effort” funding provided through the federal CARES Act, which directed more money to states that agreed not to disenroll anyone from Medicaid during the state of emergency. But Montz said the enrollment numbers also reflect new members who joined as the state was posting double-digit unemployment rates

“Those are the folks who otherwise, without the pandemic, would have had coverage somewhere else,” she said. “But maybe now they’ve lost their job or their spouse lost their employer-based health insurance. So I think it’s really, really, really difficult to overstate the positive impact expansion has had.” Throughout 2020, DMAS consistently fielded around 5,000 new applications every week. Previously, Montz said those numbers also reflected existing members who were renewing their coverage with the state.

Before coronavirus became a household word, though, widening Medicaid was a hard-won battle for consumer advocates across Virginia. Before legislators voted for expansion in 2018, the criteria for coverage were extremely narrow. Childless adults were ineligible. Virginians with disabilities could receive services, but only if they had an annual income below $9,992. Only the most extremely low-income parents qualified for the program, Montz said. That meant an income of less than $7,068 for a family of three.

Those limitations became a particular frustration in the years after Congress passed the Affordable Care Act but before Virginia expanded its own Medicaid program. When the ACA was signed into law, it automatically opened Medicaid to everyone making less than 138 percent of the federal poverty line. The idea was to create a continuum, with Medicaid covering the most low-income Americans while mid-tier earners found plans on the exchange — often partially covered by federal subsidies, said Deepak Madala, director of the Center for Healthy Communities at the Virginia Poverty Law Center.

But in 2012, the Supreme Court ruled that states could reject the expansion, which Virginia subsequently did. For the next five years, thousands of residents applied for insurance through the exchange only to fall under the “Medicaid gap,” Mandala said.

“That was easily one of the hardest things to explain to people,” he said. “That they made too little to qualify for the exchange.” Montz said there’s still little understanding of the fact that before expansion, thousands of Virginians had nowhere to turn for health care, even if they lost their jobs and were bringing in no monthly income.

But the 2018 vote also had ripple effects across the state’s health care system. Republicans agreed to expand the program soon after they nearly lost their House majority in a year in which voters listed health care as a top issue, The New York Times reported. In some areas, struggling hospitals also played a major role. Rural health systems, especially in Southwest Virginia, have always struggled with high levels of charity care and bad debt, according to state data. Without expansion, it was often impossible for hospitals to recoup any costs when uninsured patients came in for care.

“There was a concerted effort by many organizations — everyone from New Virginia Majority to the Virginia Hospital and Healthcare Association — to really drive home how Republican districts would benefit from Medicaid expansion,” said Sen. Jennifer McClellan, D-Richmond, who spent years advocating for the shift. It finally passed through amendments in a substitute budget offered by Sen. Emmett Hanger, a Republican who represents rural Augusta County.

Even now, Medicaid in Virginia isn’t totally free from disputes. Providers have spent years pressuring lawmakers to boost reimbursement rates under the program, many of which haven’t been reexamined for decades, McClellan said. And while far fewer Virginians are uninsured, the state’s share of expansion is funded through a new tax on hospitals. The hospital association has continued to lobby against efforts to reform the state’s tight oversight over new medical facilities, arguing that hospitals can’t survive competition from independent imaging and ambulatory surgery centers.

But there’s near-universal consensus that expansion has continued to build the state’s network of care for low-income residents. Medicaid members now have dental coverage after lawmakers agreed to preserve the benefit in Virginia’s pared-down pandemic spending plan. The new benefits have allowed community health centers to generate more revenue and — in some cases — expand their operations, Oswalt said. 

And at least 10 of the state’s free clinics, typically funded through grants and donations, began accepting Medicaid after the program opened to more people. Oswalt said that freed up more slots at donation-based centers for patients who still don’t have access to health insurance — including undocumented Virginians.

Like all Virginia’s free clinics, Charlottesville Free Clinic was bracing for big changes in its patient population when Medicaid expanded. (Katie O’Connor/Virginia Mercury)

“Medicaid expansion has been a godsend from the very beginning,” she said. “I think it ranks at the top, by far, of any other health care initiative in the state.”

For some legislators and advocates, the question is what to consider next after years of nearly single-minded activism. In 2020, the General Assembly passed a McClellan-backed bill to create a state-run health exchange — part of an effort to stabilize the health care market. The next year, legislators passed a companion bill from Del. Mark Sickles, D-Fairfax, that created a reinsurance pool for high-cost patients. The goal of both is to lower the price of premiums for customers buying insurance on the exchange, especially those who don’t qualify for subsidies but still struggle to afford the monthly cost.

The federal government expanded eligibility for those premiums during the pandemic, and there’s a national push by some advocacy groups to make that permanent, said Freddy Mejia, health policy analyst for The Commonwealth Institute, a think tank that advocates for low- and middle-income Virginians. Since expansion, though, health care advocacy has become more modest. 

There have been a few isolated efforts to explore universal health care in Virginia, mostly led by former Del. Ibraheem Samirah, D-Fairfax, who filed a bill directing the state’s Joint Commission on Health Care to examine the potential costs. But while it passed the House, it died in the Senate with bipartisan opposition.

“From where I’m sitting, I don’t see a lot of interest in that,” Mejia said.

Bigger developments are likely to come from an ongoing push for paid sick days, which are now required for home health workers. Democratic gubernatorial candidate Terry McAuliffe has expressed support for extending the policy across the state, telling the advocacy group Freedom Virginia that “no Virginian should have to choose between their paycheck and caring for a sick family member, or recovering from a serious illness or injury.”

Mejia said advocates are also rallying around a proposal to expand coverage under the state’s Children’s Health Insurance Program, which has one of the lowest eligibility thresholds in the country. TCI is pushing for an expansion of up to 305 percent of the federal poverty level (roughly $80,000 a year for a family of four), along with legislation that would explicitly make undocumented children eligible for insurance through a state-funded coverage option.

“We’re middle of the pack at covering our children, and there are still some serious disparities — especially for Latino and non-citizen children,” Mejia said. “So we’re advocating for one simple message: If you’re a low- or moderate-income family, your child can get coverage through the state.”  

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Kate Masters
Kate Masters

An award-winning reporter, Kate grew up in Northern Virginia before moving to the Midwest, earning her degree in journalism from the University of Missouri. She spent a year covering gun violence and public health for The Trace in Boston before joining The Frederick News-Post in Frederick County, Md. While at the News-Post, she won first place in feature writing and breaking news from the Maryland-Delaware-DC Press Association, and Best in Show for her coverage of the local opioid epidemic. Before joining the Mercury in 2020, she covered state and county politics for the Bethesda Beat in Montgomery County, Md.

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