Most of the affordability concerns that McAuliffe’s Affordability Plan is attempting to address have been caused by the expansion of Medicaid. The expansion flooded Virginia’s healthcare market, already rife with rent seeking behaviors due to the Certificate of Public Need (COPN) program, with “cheap money” providing an opportunity for the medical apparatus to drive prices up (or to increase service utilization) and claim higher profits. The effect of COVID-19 on the medical infrastructure in the state was exacerbated by this reality, thus requiring Governor Northam to use executive actions to bypass much of the regulatory structure, allowing the market to catch-up with the spike in service demand caused by the pandemic.
Ultimately, McAuliffe’s Plan is an attempt to legislate and regulate Virginia’s way through the negative effects of past legislative and regulatory burden (i.e., pass Bill #1 and then pass more bills to fix the completely predictable effects of Bill #1).
VIPP Policy Analysis: McAuliffe’s Healthcare Plans (2021)
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