Virginia and other states wrestle with whether to expand Medicaid under Affordable Care Act


Va. Gov. Terry McAuliffe listens to U.S. President Barack Obama as he hosts a meeting with the Democratic Governors Association in the State Dining Room at the White House on Friday. (Larry Downing/Reuters)

It was a purely symbolic vote, but Gov. Terry McAuliffe desperately wanted it to go his way.

The Democratic governor summoned at least four Republican delegates to his office one by one last week, twisting their arms to support expanding Medicaid in a floor vote the GOP was forcing just for show.

The effort backfired. Not only did the House trounce expansion later that day, but one of the four accused McAuliffe of threatening to kill a jobs program in his economically distressed district if he did not go along.

McAuliffe’s office said no threat was made, but his last-minute lobbying shows how high the stakes are as legislators in Richmond and statehouses across the country wrestle with whether to boost enrollments in Medicaid under the federal Affordable Care Act.

The politics of expansion are an extension of the battle over the Affordable Care Act that has raged in the nation’s capital for years — threatening to bring dug-in partisans and Washington-style gridlock to places such as Richmond, where legislators ordinarily pride themselves on working things out in the collegial “Virginia way.”

For Democrats, expanding Medicaid is not only about providing health care to the poor and disabled. It is also a way to validate President Obama’s signature achievement, the federal health-care law whose disastrous rollout and halting implementation have made it widely unpopular. Expansion is especially critical for McAuliffe, who made it the centerpiece of his campaign and his top legislative priority. He could look weak if he doesn’t deliver.

For Republicans, opposing expansion is about standing up for the principles of lower taxes and limited government. Stoking anger over the Affordable Care Act is a central strategy of the national party in congressional midterm elections. It is the main argument that Republican Ed Gillespie is making in his bid to unseat Sen. Mark R. Warner (D-Va.).

But the expansion fight also exacerbates tensions between the Republican Party’s establishment and tea party wings, with chambers of commerce and hospitals that would benefit from increased Medicaid enrollments pushing hard for it and the more conservative base vehemently opposed.

House Republicans kept Medicaid expansion out of their budget, so their vote last week on whether to add it to their spending was political theater, a way to make it fail big and publicly. Supporters, meanwhile, rolled the proposal into the Senate budget — meaning a deadlock on the issue during the coming budget negotiations could lead to a shutdown of state government.

That’s a political risk for everyone involved, but one of particular concern for Republicans, who got most of the blame for last year’s federal government shutdown and have been trying to shake the “party of ‘no’ ” label ever since.

“A potential budget impasse or any talk of a government shutdown doesn’t benefit anybody,” said former lieutenant governor Bill Bolling (R), who supports expansion and leads the Virginia Mainstream Project, a political action committee. “All that shows is a lack of political leadership on both sides of the aisle. And I think everybody gets blamed for that.”

House Republicans said their position was only bolstered by the chamber’s nonbinding but resounding 67 to 32 vote against expansion Thursday, but McAuliffe spokesman Brian Coy said the governor was optimistic that he could make it happen.

“He remains hopeful that he and members of the General Assembly can find common ground to move forward in a way that works best for Virginia,” Coy said.

Under the Affordable Care Act, states have the option to expand Medicaid eligibility to people making up to 138 percent of the federal poverty level, which is $23,850 for a family of four. McAuliffe has said expansion would provide health care to 400,000 Virginians and create more than 30,000 jobs. Most Republican legislators doubt that the federal government can afford to pick up most of the tab, which in Virginia would be $2 billion a year.

The Senate plan would not operate as Medicaid traditionally has around the country; instead, it would use the federal money to help people buy private insurance. But given that much of Virginia’s Medicaid program already uses a managed-care model involving private insurance, critics said that difference is semantics — on par with how supporters have started avoiding the phrase “Medicaid expansion” and instead are calling for “closing the coverage gap.”

House Republicans have taken to referring to the “Obamacare expansion.” On the House floor, Minority Leader David Toscano (D-Charlottesville) wryly offered a prize to the Republican who used the word “Obamacare” most during the budget debate.

“I think the politics of the Affordable Care Act and health care are going to dominate the 2014 elections,” said Nathan Gonzales, deputy editor of the nonpartisan Rothenberg Political Report. “I think it’s a particularly complicated issue at the state level.”

Gonzales noted the cases of two Republican legislators — one in Oregon, the other in Colorado — who were attacked by GOP rivals for supporting not the Affordable Care Act, but the creation of a state-based marketplace or “exchange” where people could shop for insurance available under the program.

Conservatives in Virginia had initially promoted a state-based exchange as a way to keep Washington at bay. But they decided under then-Gov. Robert F. McDonnell (R) that setting one up would make the state look like it was onboard with Obamacare, so they let the state default to a federal exchange.

Fourteen states and the District of Columbia have opted to establish insurance exchanges, while 36 states rely on the federal exchange, according to the National Conference of State Legislatures.

Next-door neighbor Maryland is among the 14, but it has experienced problems that have hardly made it a selling point in Virginia. Troubles in Maryland have included “welcome packets” with hundreds of enrollees’ confidential information being mailed to the wrong individuals and people encountering problems with the crash-prone exchange Web site being directed to call a toll-free phone number for a Seattle pottery supply shop.

The Senate bills its plan as a compromise crafted by a Republican, Sen. John C. Watkins of Powhatan. Called Marketplace Virginia, it was intended to make expansion more palatable to conservatives by imposing work requirements and significant co-pays.

“Medicaid lite,” James Madison University political scientist Bob Roberts calls it.

The plan follows in the footsteps of Arkansas, which last year narrowly agreed to use the Medicaid funds to buy private insurance. But Arkansas’s approach is the subject of high legislative drama as the state considers whether to reauthorize funding for the program, with the Senate there in favor and the House opposed.

Virginia’s House GOP has played up similarities between the Arkansas and Marketplace Virginia plans, last week hosting a conference call with Arkansas House Majority Leader Bruce Westerman (R), who said his state had “buyer’s remorse” over its private-option approach.

With Virginia’s House and Senate dug in, the General Assembly might not be able to wrap up its session as scheduled on March 8. A prolonged deadlock that ties up the state budget past the start of the new fiscal year, July 1, could cause a government shutdown.

Determined to block Medicaid without being branded as obstructionists, House Republicans have been unusually proactive in other areas, rolling out a raft of policy proposals on school-testing reform, transportation, ethics and others.

Even before the House and Senate budgets had made it to their respective chambers, House Majority Leader M. Kirkland Cox (R-Colonial Heights) was decrying a potential government shutdown and blaming it on Democrats’ insistence on expansion.

Republicans began pushing that theme before McAuliffe was elected, saying that his campaign pledge to reject any budget that did not include Medicaid expansion amounted to a threat to shut down the government. McAuliffe’s campaign said at the time that no threat was implied, but he also softened his rhetoric.

Democrats have tried to make the “business case” for expansion, arguing that it does not make sense to forgo billions in federal funding while forcing hospitals and taxpayers to absorb the costs of uncompensated care. McAuliffe has been hoping to sway rural legislators with help from local hospitals, often the biggest employers in rural areas.

Terry G. Kilgore (R-Scott), one of the four delegates summoned to the governor’s office Thursday, represents a district where a hospital recently closed, with the owners partly blaming the Affordable Care Act for its demise.

Kilgore was sympathetic but suggested that McAuliffe try twisting the arms of House leadership before his.

“He’s wanting Medicaid expansion, the House is not,” Kilgore said. “And it’s a long journey between now and the end of the session — even though it’s just two weeks. That’s a lifetime in a legislative session.”

Laura Vozzella covers Virginia politics for The Washington Post.
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