One of the issues with this program is that it creates a great amount of legacy costs, in that public employees still get full benefits after they retire, but don't have to pay into it,
With the implementation of the new Obama Health Care law the exact impact on Virginia will vary depending upon which course is taken and whether the federal reform proposal tries to cover the expenses or shift these expenses to the states. Experts have assessed the impact of a reform proposal that considerably expands government's role in the health care market by way of providing an extra $1 trillion in federal subsidies over the next ten years and tendering incentives to move present Medicaid recipients into a new federal health insurance program (the Prognosis for National Health Insurance a Virginia Perspective, 2009).
This type of program would:
augment national health care expenditures by an extra 8.9% by 2019
augment medical price increases by 5.2% above what it would have been otherwise due to the higher national expenditures by 2019
force the federal and Virginia state budget due to the augmented expenditure levels and amplified medical inflation:
Elevated medical inflation and overall expenditures will in the end lead to government expenditures that surpass the $1.0 trillion in expenditures on health funding. The net present worth of all extra federal government expenditures through 2019 that will take place as a consequence of a federal health care reform is $1.2 trillion, or a $3,900 bill for every man, woman, and child in the U.S.
Additionally to federally-funded expenditures, the net present value of all Virginia state government expenditures during 2019 that will occur as a consequence of a federal health care reform is $2.1 billion, or a $275 bill for every man, woman, and child in Virginia.
The present net present value of financial support health care reform based on President Obama's main concern will be $4,176 for every person in Virginia. Decrease financial growth in 2019 compared to the baseline situation by 4.9% for the country as a whole and 4.5% for Virginia
The expenditure on Virginia could be elevated, and the national cost lesser, if the federal government pushes the financial accountability for covering the growth of subordinate income individual's health insurance coverage off to the states. While the federal costs will go down, Virginia's costs will go up by a total of $6.8 billion with the net present worth being $5.2 billion (the Prognosis for National Health Insurance a Virginia Perspective, 2009).
Currently the state of Virginia has managed to fix their budget troubles as of late. This may be a very short lived state though depending on how the new health care reform plays itself out. Depending on the way that the new reform is implemented and how much of the cost is absorbed by the Federal government and how much is passed on to the states will depend on how much the State of Virginia is going to have to come up with. If the costs that the state is asked to absorb is large then the state will more than likely find themselves in a situation in which they once again have a budget deficit. If this happens they will most assuredly have to implement more cuts than they have already made.
About Virginia. (2011). Retrieved January 26, 2011, from Web site: