Conflict trumps compromise in Virginia’s Medicaid expansion debate

Advocates of Medicaid expansion in Virginia say the budget impasse gripping Richmond this year isn’t terribly novel, even in a city that prides itself on genteel compromise in contrast to the rancor of Washington.

But a unique cascade of circumstances that began with a transportation package passed last year over GOP objections and continued with a debate around President Obama’s health care overhaul now offers a path in which the only compromise could be a protracted conflict.

Democratic Gov. Terry McAuliffe — who ran on a pledge to foster bipartisan cooperation — has shown no inclination to abandon promises to expand the federal health benefit to hundreds of thousands of low-income Virginians. At the same time, House Republicans appear entrenched in their opposition.

At stake is the state’s two-year $96 million budget, which can’t be passed until lawmakers decide whether it will include the Medicaid money.

“The issue has devolved into a place where what appears to be one of the few potential compromises is to reach no compromise and have McAuliffe try to do something administratively,” said Bob Holsworth, a former Virginia Commonwealth University professor and longtime tracker of state politics.

Under that scenario, Mr. McAuliffe’s office would follow through on his guarantee that expansion will happen this year. Republicans would likely take Mr. McAuliffe to court but maintain they held the line on the issue.

The governor’s office has said it’s not entertaining the idea of moving unilaterally. House Republicans have said the governor does not have such authority.

The impasse, as the Virginian-Pilot noted Sunday, has roots in former Gov. Bob McDonnell’s $6 billion transportation package last year. Democrats supported the plan, in part after securing language to move forward on Medicaid by establishing a bipartisan commission that would explore expansion.

The Medicaid Innovation and Reform Commission will meet Monday, when members are expected to hear an update on the status of expansion and alternatives — but take no action.

The transportation vote divided the GOP, with many members thinking the governor gave up too much to Democrats to get a bill passed.

On the other side of the aisle, Mr. McAuliffe controversially claimed a significant role in the plan’s victory during the governor’s race. His desired narrative — that the former Democratic National Committee chairman was a paragon of bipartisan compromise — was so strong that his campaign actively discouraged Democrats from criticizing the embattled governor who brokered the deal for fear the message would be undercut.

But Mr. McAuliffe’s claims of bipartisan bona fides ran headlong into staunch Republican opposition to his principle campaign pledge during the 60-day legislative session and in the early stages of a special session on the budget. Now Democrats, who need GOP defectors to pass Medicaid expansion in the House, are the ones making offers despite controlling the Executive Mansion and having effective control of the Senate.

On the opening day of a special session last month that was called to resolve the budget standoff, Mr. McAuliffe rolled out a new spending plan that called for a two-year pilot program that would fully expand Medicaid. Republicans balked at the plan.

That proposal came after Senate lawmakers futilely put forward their own solution — a private option called “Marketplace Virginia” that would recapture federal money under Obamacare to allow low-income Virginians to buy insurance on the private market.

“Marketplace Virginia was essentially the Senate negotiating with itself,” said Sen. David W. Marsden, Fairfax Democrat.

Mr. Marsden said that when he breaks down the individual components of Marketplace Virginia for constituents, they’re receptive to the granular parts and philosophy. But the conversation invariably turns back to Obamacare — a subject the GOP is banking on propelling them to success in this year’s midterm elections.

“The politics of this is such that it is very difficult for those Republicans to pull the rug out from under the entire political strategy of their party in 2014,” Mr. Holsworth said.

Another difference between this year and past budget disputes is the public relations battle.

Neither Mr. McAuliffe nor the General Assembly are particularly popular with voters, for whom polls suggest Medicaid remains a fairly obscure priority.

In 2004, amid a budget standoff between Democratic Gov. Mark R. Warner and Republicans, it wasn’t until lawmakers adjourned that it became evident the GOP was taking the bulk of the heat from constituents. Voter sentiment could become clearer, though, as the state moves toward a June 30 deadline for a historic state government shutdown if no deal is reached.

“The brinkmanship will continue,” Mr. Holsworth said. “I don’t think either side at the moment believes that public opinion has shifted dramatically against them. Sometime before July 1, the governor’s going to have to decide whether he’s going to the brink on this.”