New Health Care Law Is Bringing Wide Benefits To Virginia

May 11, 2011 — Since enacted by Congress a year ago, the Patient Protection and Affordable Care Act, popularly known as health care reform, has been the subject of both celebration and condemnation.

Virginia's circumstances provide a clear example of what the new law aims to improve, and it is already bringing better access to care for many state residents, according to a commentary in the current issue of the Virginia News Letter, published by the University of Virginia's Weldon Cooper Center for Public Service.

While many states, including Virginia, are challenging the law, they are also receiving millions of dollars in federal funds as they work to implement it to the benefit of their residents, points out the commentary's author, Jill A. Hanken, a staff attorney with the Virginia Poverty Law Center and a longtime advocate for improving care for low-income residents.

"Enormous problems in the United States' health care system persist, and they have grown worse during the current recession," she writes. "While not perfect, the act offers sound and comprehensive approaches that will improve access to health care for millions of Americans."

At the advent of the new law, Virginia's health care picture, sketched by the article, shows:

•    The state had nearly 1 million residents uninsured, including 150,000 children, in 2010, despite being ranked seventh nationally in per capita income.
•    The percentage of residents under 65 who get health insurance at work has declined from 71.6 percent in 1999 to 65.7 percent in 2009, while the cost of that insurance has skyrocketed.
•    In 2009, only 37 percent of small businesses (those with fewer than 50 workers) offered health coverage to their staff, below the national average and down from 44 percent the year before.
•    Virginia ranked 47th in per capita Medicaid expenditures in 2008, largely attributable to restrictive eligibility rules and low payments to providers.
•    In 2009, Virginia hospitals provided $491 million in charity care services and experienced $376 million in bad debt expenses. For 29 Virginia hospitals, charity care and bad debt constituted more than 15 percent of their overall expenses.

The health care reform act addresses these problems and more, Hanken writes. The article focuses on the high cost of care and insurance premiums, the private insurance practices that leave many insured people without coverage when they need it, and the uninsured.

Several important insurance reforms are already in effect and provide significant protections to consumers, she writes, including a popular provision that allows young adults to stay on their parents' health insurance plans until they reach age 26. Some 54,000 young adults in Virginia will benefit.

Under the law, insurance companies can no longer deny coverage to children with pre-existing health conditions. It is estimated that 123,000 Virginia children will benefit. In 2014, preexisting condition restrictions will be prohibited for adults as well.

The act prohibits lifetime limits on all new insurance plans, with annual limits totally eliminated by 2014. "These are essential protections for very sick people, such as cancer patients and premature infants, who could quickly hit caps in their policies, losing coverage just when they needed it the most," Hanken writes.

For Medicare beneficiaries in Virginia, cost sharing for preventive health services – such as mammograms for breast cancer, colonoscopies for colon cancer and PSA testing for prostate cancer – has been eliminated. The act also will phase out Medicare's prescription drug "doughnut hole" requiring higher payments for high use.

Another direct benefit is the tax credit for small businesses that provide health insurance to their employees.

The state itself is directly benefiting from more than $50 million in federal grants and projects designed to help it plan for future changes, Hanken points out.

A major reform to take effect in 2014 is the required increase in Medicaid income eligibility. With Virginia's Medicaid eligibility income limits for adults among the lowest in the country, the change has enormous implications for the state, since anywhere from 270,000 to 425,000 individuals may newly qualify for Medicaid coverage, including very poor adults who have never had insurance, according to Hanken. The federal government will cover 100 percent of the Medicaid cost of this newly eligible population for three years, then eventually 90 percent.

Yet at the same time they are implementing it and benefitting from it, Virginia and other states have filed various court challenges to the new law, Hanken points out.

While these cases work through the courts, a Virginia Health Reform Initiative Advisory Council appointed by Gov. Robert F. McDonnell has developed recommendations about implementing health care reform in Virginia.

The advisory council adopted 28 recommendations focusing on improving Virginia's health system, with or without national health reform and reflecting many of the federal act's aims, Hanken notes. "Virginia is well-positioned to move forward," she writes.

Media Contact

Dan Heuchert

Assistant Director of University News and Chief Copy Editor, UVA Today Office of University Communications