RICHMOND — Virginia Republicans were supposed to be squirming by now. For months, their opposition to expanding Medicaid under the Affordable Care Act has put them at odds with some traditional allies in the business world.
Hospitals, the state chamber of commerce and corporate leaders have been calling, writing, visiting and buttonholing, pushing what they call “the business case” for expanding coverage to thousands of uninsured under the health-care law, with the federal government promising to pay most of the cost. Gov. Terry McAuliffe and other Democrats who favor expansion have been betting on that pressure to sway Republicans, particularly in rural areas where hospitals are often the largest employer and are eager for the financial girding that the coverage expansion would provide.
But the hard sell has flopped, at least so far. Just one legislator has budged on Medicaid since the year began, and that was an expansion supporter who backed off a bit.
Republicans in this once reliably red state can ill afford to lose friends as the party seeks to rebuild a brand that lost back-to-back presidential elections and all three statewide elected offices last fall.
But in this case, a wide coalition of Republicans — state, national, moderate, conservative — sees a path forward in the Medicaid fight, even as it pits them against some longtime friends.
The GOP’s strategy in Virginia is an expression of the anti-Obamacare rallying cry the party is deploying nationwide, one that in March helped Republicans win a special congressional election in a swing district near Tampa. The party believes the Affordable Care Act, with its disastrous rollout and persistent problems, will be its greatest weapon in the fall midterm elections. Ed Gillespie, the GOP front-runner to challenge Sen. Mark R. Warner (D-Va.), has focused his campaign on Warner’s support for the law.
“It’s absolutely very potent,” said Michael Short, spokesman for the Republican National Committee. “We feel absolutely it’s very much a winning issue.”
That may be true in the short term; even some Democrats think Republicans have the upper hand in the expansion debate, and they are wondering with increasing urgency what McAuliffe’s exit strategy will be in the showdown, which could shutter state government if it is not resolved before July 1.
But some of these same Democrats think the anti-Obamacare strategy will ultimately backfire on Republicans as memories of the program’s disastrous early months fade and more people enroll and begin enjoying the benefits.
“Seven million people signed up,” Senate Majority Leader Richard L. Saslaw (D-Fairfax) said. Federal officials “obviously got it fixed.”
He added: “Some feel this is their way of giving the finger to the president and the ACA. They’re whistling past the graveyard.”
Republicans may not have a choice. Opposition to the health-care law — and to the subcategory of Medicaid expansion — has unified the party like no other issue in recent memory. Just a year ago, the Virginia GOP splintered over a transportation-funding deal that imposed a huge tax increase. Rifts between the GOP’s establishment and tea party wings were on full display then, when nearly half of House Republicans bucked their own governor and speaker to vote against the plan.
Instead of exacerbating tensions within the often-fractious party, Medicaid seems to have smoothed them over in the GOP-dominated House and among Republicans generally.
“This has been the number one unifier,” said Pete Snyder, a Northern Virginia entrepreneur and Republican activist who sought the nomination for lieutenant governor last year. “You think just a year ago it [the House] was rife with strife over the tax increases. And now you have a House solidly aligned against the expansion of Obamacare and Medicaid expansion.”
The strategy carries potential financial risk for Republicans. The Virginia GOP staggered out of the fall elections with less than $70,000 on hand. Some of the business groups and corporate leaders pushing for a version of Medicaid expansion are among the GOP’s most reliable donors, according to the Virginia Public Access Project, a nonpartisan tracker of money in politics.
They include Richmond hotelier William H. Goodwin Jr., who has given more than $1 million to Republicans in the past 20 years; the Virginia Chamber of Commerce, which has made $175,000 in donations in the past 10 years, with 78 percent of that going to Republican candidates or committees; and Cheryl P. McLeskey, a Virginia Beach developer who has given $140,250 to Republicans since 1997 and $13,000 in that time to Democrats.
“It’s a very difficult position for Republicans to navigate, but right now . . . I don’t see them retreating,” said former lieutenant governor Bill Bolling, a Republican who has supported expansion.
One reason Republicans have been able to withstand the pressure: Many business leaders who are pushing for expansion don’t entirely disagree with the GOP. They are often critics of the ACA and the traditional Medicaid program, which already consumes nearly 25 percent of the state budget. They continue to rail against the health-care law even as they push to expand Medicaid under the law. And they call for expansion in a way that at least purports to keep traditional Medicaid at arm’s length: a “private option” plan called Marketplace Virginia that uses the Medicaid money to buy private insurance for enrollees.
Those business leaders take a pragmatic view: As long as the ACA is the law of the land, and Virginians are paying higher taxes to bankroll it, they’d like the state to accept the $5 million a day in Medicaid money that Washington is offering for expansion. But they are not likely to hold grudges against Republicans who oppose both the ACA and expansion, said a lobbyist for several groups supporting expansion, who spoke on condition of anonymity in order to discuss clients’ private thinking.
“I’m no fan of Obamacare. I thought it was a terrible bill,” said W. Sheppard Miller III, chairman of the Hampton Roads defense contractor KITCO Fiber Optics, who backs Marketplace Virginia. “Nobody knew what they were voting on when they passed it. But it is what it is. They are taking money out of my pocket and my employees’ pockets. We’re sending it to Washington. . . . I’m not supporting Medicaid expansion. What I’m supporting is taking taxes back we paid and lowering the cost of health care.”
Republicans say the pressure is mostly limited to hospital groups, not the average Main Street business owner. The National Federation of Independent Businesses, which represents the interests of small business, has opposed expansion. The influential Northern Virginia Technology Council has not weighed in. And the Virginia Chamber of Commerce has zigged and zagged, supporting the marketplace plan, then opposing McAuliffe’s brief bid to revert to traditional Medicaid expansion. The group also has urged passage of a timely state budget, knowing Medicaid was the main sticking point in that impasse.
“It’s not like there’s a groundswell of business or traditional allies calling up. All we’re hearing from is the hospital people and MoveOn.org people,” said House Speaker William J. Howell (R-Stafford). MoveOn.org is a liberal advocacy group.
“I think everybody who works for my hospital back home wrote me a letter — the same form letter,” Howell said.
That is not to say Republicans have found it easy to rebuff local hospitals, which the House tried to appease with an extra $118 million in its budget plan. But opponents think the federal government is so overextended that it cannot keep its promise to pick up most of the cost of expansion, potentially leaving Virginia on the hook for the $2 billion-a-year tab.
“I think we’ve all got discomfort,” said Sen. Mark D. Obenshain (R-Harrisonburg), who opposes expansion. “I understand the predicament the hospitals are in. I simply believe this is the wrong way to fix it.”
The debate has hardly registered with average Virginians, although that will surely change if the impasse drags on long enough to cause a government shutdown. Only 4 percent of the state’s voters ranked health care a top priority in a recent Quinnipiac University poll.
Those in favor of expanding Medicaid to as many as 400,000 low-income Virginians think the Republican caucus will eventually feel the pressure and splinter.
“No doubt in my mind, eventually they’ll move,” said Saslaw, the Senate majority leader.
Democrats have suggested all along that some Republicans would like to vote for expansion but are wary of primary challenges back home and of crossing Howell, who can reward allies with key committee assignments and campaign funds. Howell and other House leaders have said delegates are free to vote their conscience.
“There are a lot of people who want this to go away and want it to go away without having to vote on it,” House Minority Leader David J. Toscano (D-Charlottesville) said. “While you might not see it outwardly right now, there are people who continue to hear the business argument and hear from their constituents and are a little uncomfortable.”