RICHMOND — Gov. Terry McAuliffe (D), who vowed in June to defy the Republican-controlled legislature and expand health care to 400,000 uninsured Virginians, unveiled a much more modest plan Monday after being thwarted by federal rules and a last-minute change to state budget language.
McAuliffe outlined measures to provide health insurance to as many as 25,000 Virginians, just a fraction of those he had hoped to cover by expanding Medicaid under the Affordable Care Act.
The biggest change, covering 20,000 people with severe mental illness, will need funding approval from the General Assembly to continue past the current fiscal year. McAuliffe also offered proposals to improve care for people already in Medicaid and boost outreach efforts to those who qualify but are not enrolled.
McAuliffe renewed his pledge to keep fighting for Medicaid expansion, which will be the subject of a special legislative session Sept. 18. But the prospect seems dimmer than ever, with a special election this summer leaving both the House and Senate firmly in Republican control.
On Monday, acknowledging the limits of what he could do unilaterally, McAuliffe put responsibility for fully expanding insurance coverage squarely in the legislature’s lap.
“I want to be crystal clear that while the plan that I am announcing today will do a lot of good for a lot of people, it does not solve the larger problem of providing health insurance coverage to uninsured Virginians,” McAuliffe said.
Of lawmakers, he said: “They unequivocally have the power to expand and close the coverage gap. . . . With that power also comes responsibility.”
Republican reaction to McAuliffe’s announcement was mixed. Sen. William M. Stanley Jr. (R-Franklin) said he supported granting coverage to the mentally ill. Senate Majority Leader Thomas K. Norment (R-James City) reserved his praise primarily for McAuliffe’s decision not to trigger a “constitutional crisis” by enacting “major policy changes unilaterally by executive fiat.”
House Speaker William J. Howell (R-Stafford) said only that he was “reviewing” the governor’s plan, while the Republican Party of Virginia skewered McAuliffe for coming up short.
“The emperor has no clothes,” party spokesman Garren Shipley said. “Once again, Terry McAuliffe has far overpromised and mightily underdelivered.”
McAuliffe said he can take regulatory action to enroll 20,000 people who are severely mentally ill in Medicaid, the federal-state health-care program for the poor and disabled. The change would cost $160 million a year, half from the state, half from the federal government. McAuliffe can tap $40 million in excess health-care funds in the current budget to pay for the first six months of the program, from January to the end of the fiscal year in June. But he would need the legislature to approve spending $80 million a year to keep those patients enrolled after that.
The plan also calls for providing insurance to 5,000 children of low-income state employees, though some of them — officials could not say how many — might already have coverage. A change in federal law under the Affordable Care Act authorizes McAuliffe to enroll those children, his aides said. Because it shifts costs from the state to the federal government, there is no need to have the legislature appropriate the funds.
McAuliffe called for expanding dental coverage to 45,000 pregnant women who are already enrolled in Medicaid for other health needs. His plan also includes more outreach to people who are eligible for Medicaid but not enrolled.
“This is a step in the right direction,” Chris Lillis, state director of Doctors for America, said in a written statement.
Del. Thomas Davis Rust (R-Fairfax), the lone House Republican who has supported a form of Medicaid expansion, said the governor did all he could — but that it amounted to very little. “He’s filling a couple of minor gaps, but a lot of it relies on getting people enrolled who are already qualified,” Rust said. “There’s only so much he could do.”
Democrats have pushed to expand Medicaid under the ACA, saying that it would provide health care to needy Virginians and create more than 30,000 jobs. Republicans have opposed the move, arguing that the federal government cannot afford to keep its promise to pick up most of the $2 billion-a-year cost.
When House Republicans dug in against Medicaid expansion, McAuliffe quietly began exploring other options. The biggest stumbling block: a requirement in the state constitution that all spending — even pass-through money from Washington — be appropriated by the General Assembly.
An obscure bit of budget language that went on the books under his Republican predecessor seemed to offer a way around that issue. The language appropriated a “sum sufficient . . . to implement coverage for newly eligible individuals pursuant to . . . the Patient Protection and Affordable Care Act.” It was inserted to have money in place to expand Medicaid if, and only if, a state commission agreed that certain reforms to the program had been met.
In June, a conservative blogger took note of the language and warned that it gave McAuliffe the money he would need to expand Medicaid on his own. That set off an uproar among some Republicans who pushed at the last minute to remove it through a budget amendment.
Three people familiar with the administration’s planning, who spoke on the condition of anonymity because they were not authorized to discuss it, confirmed that the language had been key to the administration’s plan.
Once it disappeared, the administration made a series of proposals to federal officials on other ways to expand coverage. Health-care advocates briefed by state officials said the federal government rejected some of the ideas — such as funneling Medicaid money through a partnership that would be set up between health plans and hospitals, or providing Medicaid money as a grant to a nonprofit agency — because they did not conform to Medicaid rules.
McAuliffe spokesman Brian Coy declined to comment on that account but repeated McAuliffe’s contention that he and federal officials are open to creative solutions.