McAuliffe declines to pursue unilateral Medicaid expansion in Virginia

Virginia Gov. Terry McAuliffe will not attempt to unilaterally expand Medicaid coverage to 400,000 uninsured Virginians, he said Monday, presenting a more modest plan that would largely leverage existing funds to provide coverage to far fewer people than Democrats had hoped when he took office in January.

Mr. McAuliffe promised the measures unveiled Monday to extend coverage to the dangerously mentally ill and children of low-income employees, for example, would only be first steps and insisted he was not giving up on broader pursuits.

“These steps are just the beginning, and we must continue to press forward together to achieve better health for all of our citizens,” he said.

But the announcement signifies a contrast to his public pronouncement just a few months ago that in the face of “demagoguery, lies, fear and cowardice” from GOP opponents, he would press forward on his own.

Most immediately, the 10-step plan unveiled Monday would provide medical and behavioral health care to approximately 20,000 people in the state with severe mental illness and 5,000 children of state employees who lack coverage.

Mr. McAuliffe said he will also use federal and state resources to help enroll an additional 35,000 children in FAMIS, the state’s health insurance program for children, and 160,000 people in the federal marketplace for health insurance.

Democrats in the state legislature lauded the move as a positive step forward, but Republicans slammed him for overpromising and underdelivering after he declared in July — amid a tense standoff over Medicaid and the state budget — that he would move forward unilaterally.

Senate Majority Leader Thomas K. Norment Jr., James City County Republican, alluded to the possibility that Mr. McAuliffe could have made the policy change by “executive fiat” and said the policies would ultimately need General Assembly approval to be made permanent, and would be given consideration during the 2015 session.

“Now, however, we have an opportunity to put the contentiousness of the last eight months behind us and return to enacting policies in the manner prescribed by the Constitution of Virginia,” he said.

Indeed, the move is a tacit acknowledgment of the political and legislative realities of the issue but also signifies a significant setback for the Democratic governor, who repeatedly pledged on the campaign trail last year and in his first months in office that expanding the federal program that provides health care to the low-income uninsured would be among his highest priorities.

The provision in the Affordable Care Act, commonly known as Obamacare, calling on states to expand the federal-state health care program for the poor to people earning up to 138 percent of the federal poverty level was made optional by the U.S. Supreme Court in 2012. More than half of the states across the country — including ones run by Republican governors and with GOP-controlled state legislatures — have passed some form of expanded coverage or private plan that utilizes the federal dollars in the law.

The federal government would shoulder nearly all of the costs of the expanded coverage under the law, but the GOP has said the feds cannot be trusted to make good on that promise.

Republicans in the Virginia General Assembly this year resisted the move, creating a deadlock that led to a protracted budget standoff in the then-divided legislature, with the Republican-led House and Democrat-controlled Senate refusing to consider the other’s respective budget proposals.

After Republicans emerged victorious from the showdown, Mr. McAuliffe asked his health and human services secretary to present a report outlining his options and hinted that he would press forward with a more ambitious plan.

He used a line-item veto on an item Republicans inserted into the budget, making it substantially more difficult for him to expand Medicaid on his own. House Speaker William J. Howell, Stafford Republican, then ruled the veto out of order, meaning the matter could end up in court if either side pressed the issue.

The state legislature is due to return to Richmond next week to weigh ideas on expanding Medicaid and/or health care coverage in Virginia.

Delegate Thomas Davis Rust, Fairfax Republican, has filed a proposal akin to a compromise plan floated by several moderate Republicans earlier in the year that he says would help Virginia recapture some of the funds it’s sending to Washington and use them to help some 260,000 people purchase insurance on the private market.

“Virginians and Virginia businesses are paying for this right now, and we’re not getting any value from it,” he said Monday. “I think it’s fair to say there’s a lot of interest, and a lot of folks seem to think that we do have an issue [that] needs to be addressed, and this is one approach to do it.”