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Assembly facing off over Medicaid growth

RICHMOND—House and Senate lawmakers will unveil two competing versions of the state budget on Sunday.

Those two budgets are expected to look very different in one key area: Medicaid expansion.

And that one issue could hang up budget negotiations up to, or past, the session’s scheduled adjournment next month.

Medicaid expansion looms as the biggest issue this session—the question of whether to expand the government insurance program, using largely federal tax dollars, to pay to cover more low-income Virginians.

Democrats, including Gov. Terry McAuliffe, say yes; House Republicans say no, because they say they distrust federal payment promises and want more time to work on reforms to the Medicaid program.

McAuliffe late Wednesday announced a reduction of about $140 million in the revenues the state is expecting to bring in over the next two years. He told reporters that’s even more reason why the state should accept federal dollars for Medicaid expansion.

Last week Sen. John Watkins, R–Powhatan, unveiled what appears to be the Senate’s proposal, a private-option insurance plan that would cover people who would have been eligible for Medicaid under expansion. It pointedly avoids the terms “Medicaid” and “expansion,” as senators hope to woo recalcitrant House Republicans by demonstrating how a private plan could work the system, getting federal dollars to pay for covering more Virginians but avoiding bloating the government health program.

Watkins and other senators said last week that his proposal will be incorporated into the Senate’s budget, which the public will see for the first time Sunday. That sets up a budget fight over the thorniest issue of session, and House Republicans have a problem with that.

“The problem is, if you embed this in the budget process, you endanger higher education, you endanger K–12,” House Majority Leader Del. Kirk Cox, R–Colonial Heights, said during a Wednesday news conference held by House GOP leaders.

You don’t have to look far back in legislative history to find budget negotiations stalled and sessions lengthened over philosophical differences between the House and Senate on single issues. Last year, the same question of Medicaid expansion threatened to hold up budget talks as Senate Democrats refused to pass a budget until Medicaid was addressed. Tax issues have caused similar budget impasses and session extensions in the past.

To end last year’s impasse, Democrats and Republicans agreed to punt the issue to a Medicaid Innovation and Reform Commission. The MIRC, Cox said, was created so this budget-busting argument wouldn’t arise.

Cox and other House Republicans say Watkins’ “private-option” bill is just Medicaid expansion by another name. And they aren’t planning to yield on it.

“If you don’t reform the system first, it’s destined to fail,” said House Appropriations committee chairman Del. Chris Jones, R–Suffolk. “I’ve been very clear from day one. Reforms first, and MIRC has not finished its work.”

House Speaker Bill Howell, R–Stafford, said he doubts supporters of Watkins’ plan can peel off enough of the 67 House Republicans to pass it.

“When you look at the numbers, you can’t expand Medicaid,” Howell said.

House members said they do expect to invest more money in higher education, mental health and domestic violence prevention.

And they might budget some money to help the hospitals that are facing losses from health reform-related cuts. Jones wouldn’t say.

“There are certainly things we can look at,” Jones said.

McAuliffe declined to say whether he thinks Medicaid expansion, or a private-option alternative, should be negotiated through the budget.

“I don’t want to get into that discussion. We’ve got a ways to go,” he told reporters.

But he said he’s open to Watkins’ plan or “any ideas” and thinks lawmakers should stop saying no before sitting down at a table to talk.

Both houses unveil their budget proposals this Sunday. Then, after some procedural back-and-forth, the real work of negotiating a budget compromise happens between 11 or 12 lawmakers, late into the evenings on the upper floors of the General Assembly Building. House and Senate negotiators sit down and talk through each budget area. They must agree, in the end, on one budget plan.

Chelyen Davis: 804/343-2245



Under the Affordable Care Act, states were to expand the Medicaid program to cover people earning up to 138 percent of the Federal Poverty Level ($15,856 for an individual or $26,951 for a family of three in 2013). The law requires the federal government to pay for 100 percent of expansion costs the first three years, then 90 percent thereafter.

But the U.S. Supreme Court struck down the Medicaid expansion provision in the law, saying it should be an option for states.

As of February 2014, 26 states and the District of Columbia have opted to expand Medicaid. Virginia so far has opted not to do so but has a legislative commission charged with looking into reforms including expansion.