By Emmett Hanger
OWe face a unique opportunity right now when it comes to funding basic services in Virginia. Governor Glenn Youngkin and the General Assembly must be aware of all of the obligations we have to our constituents and be prepared to properly fund basic services that impact the people of Virginia.
This opportunity is the result of a combination of unique factors: excessive federal spending in response to the COVID-19 pandemic, better-than-expected economic growth, and state government revenues that far exceed forecasts.
The federal government’s allocation of relief funds to states through the American Rescue Plan Act and the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) has contributed to a substantial increase in revenue, particularly due to provisions such as than enhanced federal match for Medicaid patients. As a result, over the past 18 months, the legislator has been given some flexibility without duly overburdening the taxpayer. Additional funds from the General Fund were largely not needed to meet many needs at the height of the pandemic.
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This somewhat artificial and temporary saving has also created a solid basis for the current budget and puts the General Assembly in a position where significant additional resources are at hand. It is our duty to look to the future and recognize that these dollars are limited and must be spent wisely. This moral and fiscal responsibility demands that lawmakers take a candid look at our current underfunding of essential services critical to the health and safety of Virginians.
The pandemic has also served as a catalyst for the exposure of significant issues in our health care delivery system, particularly in our mental health facilities. To date, we have not been able to muster the funding and the will to move from large residential care to community and home-based services. The General Assembly and the Governor must make it a priority to close this gap.
Estimates show that Virginia’s population aged 65 and older will grow by nearly 20 million over the next eight years and by more than 30 million by 2050. That’s important, because 65 is the age at which more than two-thirds of Virginians have multiple chronic conditions requiring care. By investing in community and home-based services and expanding them now, we can recognize the savings later, as it is much more cost effective to use private providers in community settings.
Community and home-based services provide cost savings of 95% to 98% compared to institutional care, as they reduce emergency room visits and reduce hospital stays and lengths of stay. There is also the untold reckoning that community and home-based services are often the preferred method of treatment and are consumer-focused rather than institution-focused.
Despite the clear benefits of investing in a strong home and community care delivery system, Medicaid personal care reimbursement rates have not been able to keep pace with rising minimum wages and, more specifically, again, from the rise in salary wage rate.
The current reimbursement rate for personal care is $17.22 per hour. A recent study by the Department of Behavioral Health and Developmental Services found that the rate should be over $31 per hour. Failure to adequately fund home health care workers sends a clear and unfortunate message: you are not valued.
However, the unexpected budget surplus of $6.6 billion over the biennium gives us the opportunity to reassess the resources that support and put the interests of Virginians at the forefront of governance. Some of this can be accomplished by simply increasing Medicaid reimbursement rates for community and home services.
If we don’t, we’ll end up with fewer providers and even more Virginians struggling to find care. The increased tariffs will improve access and quality of care, ultimately resulting in long-term efficiency and savings for taxpayers. Investing in home and community care gives people more say in the care of themselves and their loved ones, and allows them real choice about their health care needs.
More importantly, as the House of Delegates and State Senate move closer to bipartisan agreement on a new two-year budget, we don’t have to choose between funding our basic needs and granting tax relief for Virginia families. We can do both responsibly.
In addition to health care, with a clear need for additional funding in behavioral health, I can make similar arguments for increased funding in our schools, law enforcement, and transportation services. Our basic services, which impact all Virginians in one way or another, can really be improved as part of this economic windfall.
Our top priority should be to adequately fund basic services and then provide appropriate tax relief to Virginia families through an immediate return of a portion of the current surplus. We should also address revisions to our tax code, which will make it fairer, without compromising our ability to maintain adequate resources to fully fund basic services in years to come.
Adequate funding for basic services and tax relief: We can do both, and I am confident that the General Assembly and the Governor’s administration will find a way forward.
Emmett Hanger, R-Augusta, represents the 24th District in the Virginia Senate. Contact him at: [email protected]