Virginia Gov. McAuliffe seeks legislative bypass for Medicaid expansion


Virginia Gov. Terry McAuliffe receives a standing ovation before delivering remarks regarding his first 100 days as governor to an audience of cabinet secretaries, staff, lobbyists and media at the Library of Virginia in Richmond on April 21. (Bob Brown/AP)

Gov. Terry McAuliffe, seeking a path around the legislature to expand health coverage for the poor, has plenty of possible routes to follow — every one of them a potential dead end.

The Democratic governor is in uncharted territory as he looks for a way to expand Medicaid by executive action if he cannot persuade the Republican-dominated House of Delegates to go along.

McAuliffe has not confirmed that he is pursuing such a strategy — something The Washington Post disclosed this week — much less gone public with the legal reasoning behind it.

But outside groups have come up with a range of ideas, among them setting up a private consortium or declaring an emergency that might empower the governor to appropriate funds.

Health-care advocates, Capitol insiders, and legislators for and against expansion shared ideas on the condition of anonymity, and they all were uncertain about whether any would stand up to legal scrutiny in a state where the constitution requires the legislature to sign off on all spending — even pass-through money from Washington.

And Republicans stand ready to challenge McAuliffe if he tries it.

“I think they are engaged in a terrible miscalculation about the public sentiment,” said Sen. Mark D. Obenshain (R-Harrisonburg). “And I don’t believe the people of Virginia are going to stand by and let him do it without consequences.”

Advocates of expansion say they remain intent on getting House Republicans on board with expanding Medicaid under the Affordable Care Act.

“Right now, we’re focused on a legislative solution and will keep working to speak to legislators and encourage them to accept federal funds to close the coverage gap,” said Anna Scholl, executive director of ProgressVA, a progressive advocacy group.

It is not clear what theories the governor’s office is exploring.

Among the possibilities floated by others: dissolving the commission the General Assembly created last year to authorize expansion if certain changes to the existing Medicaid program are made. That would, at least by some interpretations, take the decision away from the panel and give it to the governor.

That still leaves the question of how to do away with the Medicaid Innovation and Reform Commission (MIRC). Attorney General Mark R. Herring (D) could argue that the General Assembly acted unconstitutionally when it created the MIRC by delegating legislative authority to the panel. Then-Attorney General Ken Cuccinelli II (R) raised exactly that objection when legislators created the MIRC, but lawmakers later tweaked the language to overcome his objections. Herring voted in favor of creating the MIRC, so belatedly embracing Cuccinelli’s position would require some awkward legal gymnastics.

Another theory is that McAuliffe could claim some sort of emergency power to spend money on his own. After the Sept. 11, 2001, terrorist attacks, then-Gov. James S. Gilmore III (R) boosted unemployment benefits by $100 a week after declaring an economic emergency. Perhaps McAuliffe, the thinking goes, could claim an economic emergency if a hospital that might benefit from additional Medicaid funds was about to go out of business.

There is some reason to believe that the Gilmore example would not translate to the present day, not least of all because the loss of a hospital would not represent an economic shock on a par with the terrorist attack on the Pentagon.

Also, Gilmore could have relied on his authority as governor to tinker, in a limited way, with existing appropriations. It is possible that there will be no state budget in place — and therefore no appropriations to shift around — if McAuliffe tries to expand Medicaid on his own. The Medicaid debate has stalled passage of the budget; if the deadlock is not resolved by July 1, state government could shut down.

McAuliffe has been saying for some time that he will not allow state government to shut down. In recent days, it has become clear that he is not promising to agree to a budget deal before the deadline. Rather, he is promising to invoke emergency powers to keep at least essential functions of government open.

“I have a responsibility. I take an oath of office that I am going to protect the citizens of the Commonwealth of Virginia, and I’ll take whatever steps are necessary,” McAuliffe said in an interview on WTOP radio’s “Ask the Governor” program.

Even in that case, McAuliffe would be on uncertain legal ground. Legislators on both sides of the aisle say they don’t want Virginia to start operating like Washington, failing to pass budgets as a matter of course. Virginia prizes its reputation as a well-managed state, and business leaders have warned that a shutdown could cause the state’s stellar bond rating to take a hit.

Another theory is that insurance companies and hospitals could set up a consortium, similar to a public utility, that would channel the federal money to them. That money would still have to be appropriated, however, requiring the legislature’s approval.

Yet another idea is to stack the state’s Medicaid board with McAuliffe appointees. The board sets Medicaid eligibility standards for the state, so it could implement the standard called for under the Affordable Care Act: 138 percent of the federal poverty level, or about $15,000 for an individual.

That action would allow an additional 400,000 Virginians to enroll in Medicaid, but at much higher cost because they would be enrolled in a way that qualifies for much lower federal reimbursement. Action by the Medicaid board would expand the rolls of the existing Medicaid program, for which the federal government pays half the cost. Under the ACA, Washington promises to pick up the whole $2 billion-a-year tab for the first three years of the expansion and 90 percent after that.

Laura Vozzella covers Virginia politics for The Washington Post.
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