House and Senate in Virginia at loggerheads over Medicaid expansion

Virginia’s Republican-controlled House of Delegates voted overwhelmingly Thursday to reject Medicaid expansion, signaling in the strongest terms yet that the chamber does not intend to budge on the marquee issue of this year’s legislative session.

With the 67 to 32 vote, an impasse is seen as all but inevitable with the state Senate, where Democrats and moderate Republicans have joined to support expanding Medicaid as allowed under the Affordable Care Act. Both houses passed their respective budget proposals Thursday, so the measure — and all other budget differences between the two chambers — will be taken up in negotiations next week.

Supporters and opponents of Medicaid expansion, which would tap billions in federal dollars to expand insurance for the poor, began casting blame for a showdown that could push the General Assembly past its March 8 adjournment deadline and perhaps even cause a state government shutdown.

In a sign of the high stakes — and raw nerves — over the issue, a Republican delegate accused Gov. Terry McAuliffe (D) of threatening an economic development project in his district if he didn’t support expansion. A McAuliffe spokesman denied the account.

McAuliffe has put enormous political capital into the effort, hoping both for a budget windfall and to help validate a Democratic president’s key achievement. But for Republicans, the stakes are equally high. GOP leaders must heed the will of their small-government base, but they are also deeply sensitive to the national view that they are the party of “no.”

At its core, the debate is less a partisan brawl than a fight within the Republican Party. On one side is a conservative House caucus sticking to long-held principles of limited government and lower spending; on the other is a moderate group of GOP senators mindful of the changing political landscape of Virginia and motivated more by pragmatism than ideology to take advantage of federal largess.

The chief architect of the plan House Republicans rejected is Sen. John C. Watkins (R-Powhatan). Watkins folded a host of Republican-friendly components into his proposal, which is called Marketplace Virginia.

The plan would seek federal permission to impose a requirement that unemployed recipients of coverage try to find work. It would push recipients to pay up to 5 percent of their wages for their insurance and add other market-based incentives to reduce spending. And it would allow Virginia to back out of the program if the federal government shorts the state in future years.

The proposal would cover an estimated 255,000 people in households earning up to 138 percent of the federal poverty level, which is $23,850 for a family of four. It would use $1.7 billion of the taxes collected in Virginia under Obamacare to buy commercial insurance plans for the uninsured in the state.

One thing the proposal does not do, however, is seek to dismantle Obamacare. And Watkins believes that’s the ultimate sticking point for his colleagues down the hall.

“They are trying to exhibit their disdain for the Affordable Care Act,” he said. “They feel if enough people refuse to use it, somehow it’s going to go away, that it will fail.”

Watkins said that tens of thousands of Virginians have already signed up for insurance on the federal exchange. If Obamacare went away, those individuals “wouldn’t have insurance. You kind of go, ‘Whoa. Come on, guys, ” Watkins said.

Last week, House Speaker William J. Howell (R-Stafford) said that “we don’t all walk in lock step. There are 67 of us [Republicans in the House], and I think the vast majority of those 67 agree. Not everybody in our caucus agrees with this position.”

As it turned out, 66 Republicans, including the speaker, agreed.

“We wanted them to have a clean vote because we wanted to be able to say, ‘This is where our caucus stands,’ ” said House Majority Leader M. Kirkland Cox (R-Colonial Heights). “And that 67 vote, I’m very confident.”

The vote was not purely along partisan lines: Johnny S. Joannou (D-Portsmouth) voted against expansion, and Thomas Davis Rust (R-Fairfax) voted for it.

Still, Thursday’s vote did nothing to change the basic political dynamics that will shape the hardest-fought debate in Richmond this session. The insurance plan remains a centerpiece of the Senate’s budget and is still headed for a conference committee, where a handful of legislators from the House and Senate will try to hash out a compromise before March 8.

After more than hour of debate, three Senate Republicans — Watkins, Emmett W. Hanger Jr. (Augusta) and Walter A. Stosch (Henrico) — voted with Democrats to endorse the plan despite the concerns of more conservative members of the GOP caucus. The plan is “our attempt to glean the best of what we’ve seen in other states developing around the nation,” Hanger said.

Senate conservatives joined their House colleagues in denouncing the effort. “The federal government has an uncanny ability to screw up an otherwise good idea,” said Sen. Mark D. Obenshain (R-Harrisonburg).

Democrats countered that it made no sense to reject the federal funds. Majority leader Richard L. Saslaw (D-Fairfax) said, “For us to turn this money down would be an absolute act of lunacy.”

Del. Riley E. Ingram (R-Hopewell) said McAuliffe called him to his office before the vote and threatened a biofuels project in his economically distressed district if he did not support Medicaid expansion.

“The only thing the governor said was if I did not support Medi­caid, that the Senate was going to kill my bill,” Ingram said. “Hey, I’ve been in politics a long time, 20-something years. And I know what hardball is, and I understand.”

He said he told the governor he’d think about it but decided, “I can’t do that.”

McAuliffe spokesman Brian Coy disputed Ingram’s account.

“That’s unequivocally false,” Coy said in an e-mail. McAuliffe and Ingram “had a cordial meeting this morning about several issues, including closing the coverage gap and their mutual support for the Hopewell project. He will continue to encourage House Republicans to put Virginia families and our economy ahead of partisan ideology and join the bipartisan coalition that supports Marketplace Virginia.”

Republicans who oppose expansion have repeatedly warned that the federal government is an unreliable long-term partner, particularly given its own severe budget woes, and that Washington can’t be trusted to keep sending Virginia all the funds it is promising today. Under the Affordable Care Act, the federal government would initially pay 100 percent of the cost of expanding Medicaid and would later cover 90 percent.

House Republicans say Medi­caid spending is already rising at an unsustainable clip and is on track to devour other crucial areas of the budget, including education.

Expansion opponents also have warned that Washington would not agree to many of the strings backers of the Senate plan are promising will be included.

But it has already done so in some cases. For instance, Arkansas, which has been offering a “private option” akin to the Virginia proposal, can pull out if the promised federal funds fall short. And Medicaid rules already allow states to require beneficiaries to spend a percentage of their own money on their insurance.

A requirement that the newly insured seek work has not been endorsed by federal officials. In the House debate Thursday, Appropriations Committee Chairman S. Chris Jones (R-Suffolk) said that part of Watkins’s plan was “aspirational” but not guaranteed to come to fruition.

Jones said ongoing Medicaid reforms must have a chance to show results before any expansion.

He also predicted that Democrats will force a shutdown over the issue. “Our teachers would not get paid . . . law enforcement wouldn’t get paid. VDOT would probably have to shut down, and we’d have to lay state employees off,” Jones said.

Watkins and other Senate colleagues agree that a deadlock is possible, but they offered a different point of view on who would take the blame if legislators leave town without a budget.

“I think that’s the way it’s going to turn out unless they’re willing to make some concession and adopt most of our bill,” said Sen. Charles J. Colgan Sr. (D-Prince William), co-chairman of the Senate Finance Committee.

Legislators might recess for a couple weeks or a month, or they could be called back by the governor, Colgan said. In any of those cases, time at home listening “to what their constituents are saying is going to help them make up their mind,” Colgan said.

Mike Laris came to Post by way of Los Angeles and Beijing. He’s written about the world’s greatest holstein bull, earth’s biggest pork producer, home builders, the homeless, steel workers and Italian tumors.
Laura Vozzella covers Virginia politics for The Washington Post.
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