RICHMOND — Gov. Terry McAuliffe intends to make another push for Medicaid expansion despite intense opposition from Republicans, who retained full control of the General Assembly in elections last week.
McAuliffe (D) said he will pursue a new strategy that he thinks will be more palatable to conservatives — one that he said would allow Virginia to extend health-care benefits to 400,000 uninsured citizens at no cost to the state. Previous plans have called for Virginia to eventually pay 10 percent of the annual $2.4 billion cost, which amounts to $240 million.
“I do believe we will be able to present this in a fashion with zero obligation to the state,” he said.
McAuliffe made the comment in off-the-cuff remarks to reporters two days after last week’s elections. Given Democrats’ failure to win control of the state Senate on Tuesday, he said he would spend the coming General Assembly session focused on economic development, education and other issues with bipartisan appeal.
But when asked if he also planned to make Medicaid a priority, McAuliffe said he would — in a no-cost way. He provided few details.
The notion was greeted skeptically by Republicans, who took McAuliffe’s comments to mean that he is considering a “bed tax” or “provider assessment” — the subject of a state work group that wrapped up in October.
Under the Affordable Care Act, states that allow more people onto their Medicaid rolls can pass along most of the cost to the federal government. Once the law is fully implemented in 2020, states are supposed to pay 10 percent.
In a series of meetings this year, Virginia’s Provider Assessment Work Group discussed the possibility of charging hospitals a new tax, perhaps 1 to 3 percent of gross revenues, then using that money to cover the state’s share of the Medicaid expansion tab. The group also discussed using that tax revenue in other ways to shore up the health-care safety net, such as increasing Medicaid reimbursement rates.
When asked if his plan involved a new hospital tax, McAuliffe said it was too soon to share details. But he indicated that it would require hospitals to contribute money in some way, which would then be leveraged to bring a larger amount back to the hospitals.
“I do believe we ought to wait for the details to go out,” he said. “Obviously we’re in a lot of negotiations with different ways. But hospitals clearly want this money. . . . For every dollar they put in, they get a multiple back.”
The approach is similar to one adopted this year in Indiana, where hospitals provide the state’s contribution. Gov. Mike Pence (R) went along with the expansion plan in January, billing it as a means of overhauling Medicaid because it requires enrollees to make co-payments for health-care services and to participate in job search and training programs.
Nonetheless, Virginia House Republicans have signaled disapproval. “I think it’s probably a non-starter,” said House Speaker William J. Howell (R-Stafford). “We’re always looking to work with the governor when it’s something that is sound and makes sense. This makes no sense at all. As I see it, it’s just a shell game.”
McAuliffe made expansion of Medicaid under the Affordable Care Act the centerpiece of his 2013 campaign, saying that it would create 30,000 health-care jobs and provide health-care coverage to needy Virginians.
Republicans have objected to expanding what they say is already a fast-growing entitlement program, warning that it would crowd out other state priorities such as education. They also have contended that an overextended federal government cannot afford to keep its promise to foot most of the bill.
McAuliffe and the Democrat-controlled Senate made an aggressive push for expansion in his first year as governor, taking the state to the brink of a government shutdown before eventually caving to the GOP-dominated House. The governor called for expansion again this year, but with both the House and Senate in Republican hands, he never put his weight behind it.
He predicted that he might get more takers now if expansion costs the state nothing.
“If we can do this in a way that doesn’t cost the state any money, no financial obligation to the state . . . I’m going in hopeful that we can get an agreement on this,” he said. “I’ve been quietly meeting with legislators, talking to legislators. I’m going in optimistic.”
McAuliffe’s spokesman, Brian Coy, cautioned against reading too much into the governor’s remarks.
“I don’t think it’s a reflection of any final plan at this time, but more about the process we’re following that we can do this in a way that doesn’t cost taxpayers anything,” he said.
A group that represents nonprofit nursing homes, LeadingAge Virginia, opposes having the tax applied to those facilities, said Dana Parsons, the organization’s legislative affairs legal counsel. Some of them do not accept Medicaid patients, so they would be charged the tax but not benefit from expansion.
Sean Connaughton, president of the Virginia Hospital & Healthcare Association, said the group was not on board with any particular plan. In previous years, the group has opposed “provider assessments,” but Connaughton said hospitals are looking for ways to make up for growing charity-care costs and funding cuts resulting from the Affordable Care Act.
“Given the mounting pressure caused by these factors and the lack of offsetting state-based policy relief, Virginia’s local hospitals and health systems are evaluating a range of creative options to stanch the bleeding,” he said. “At this time, however, Virginia’s hospitals have not committed to pursue one or any combination of potential avenues to address these severe financial challenges.”