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Medicaid expansion fight could shut down Virginia government

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(Bloomberg) — The partisan divide in Virginia over expanding Medicaid under the Patient Protection and Affordable Care Act (PPACA) is threatening to shut down state government, just as it did on the federal level in October.

Gov. Terry McAuliffe, D, who took office in January, said during his campaign he would use the budget to push lawmakers to expand the joint federal-state program for the poor. Republicans who control the House of Delegates accuse the governor of making the spending plan a “hostage” to offering coverage for more than a third of the commonwealth’s 1 million uninsured residents.

“Trying to expand a broken program will really not serve those people,” Republican House Majority Leader Kirkland Cox said in a telephone interview. “It would never pass without using the budget as leverage.”

Virginia’s fight shows how entrenched the opposition to broadening Medicaid coverage remains. More than half of U.S. states have expanded the program — including eight with Republican governors — and advocates say all inevitably will. Twenty-four states haven’t taken federal funding to insure more residents, and Republicans in Georgia, Kansas and Tennessee enacted laws during the past month to prevent any governor from acting alone.

“There’s a lot of turbulence,” said Richard Nathan, the former director of the Nelson A. Rockefeller Institute of Government in Albany, New York. “It’s not rational; it’s about politics.”

Nathan, who’s directing a study of the law’s implementation, said he’s surprised that more states haven’t overcome opposition to Medicaid expansion. There’s the lure of federal funding covering 100 percent of enrollees for the first three years and 90 percent after, pressure from hospitals and the fact that states declining expansion are bordered by neighbors providing more coverage.

PPACA required that Medicaid be offered to anyone making less than 138 percent of the federal poverty level, about $16,000 for an individual. The U.S. Supreme Court’s 2012 decision declaring the law constitutional made expanding the program optional for states.

So far, 26 states and the District of Columbia are implementing expansion, according to the Henry J. Kaiser Family Foundation. Nineteen states aren’t — all with Republican-controlled legislative and executive branches except for Montana, which has a Democratic governor, and Maine, where Democrats lead the legislature. There’s open debate in five.

Of those, Indiana, Pennsylvania and Utah are seeking federal approval to expand on their own terms, much as Arkansas and Iowa won the ability to use federal dollars for private coverage. The Republican-led Missouri legislature has blocked expansion efforts by Gov. Jay Nixon, D.

In Virginia, House Republicans have so far blocked McAuliffe’s efforts to extend coverage to about 400,000 people, resulting in a standoff that could shut the government if there’s not a budget in place by July 1.

A poll this month by the Wason Center for Public Policy at Christopher Newport University in Newport News showed that 53 percent of voters oppose expansion, in part because “Republicans are winning the debate,” said Quentin Kidd, the center’s director.

House leaders are “as solid as marble” and few members are breaking ranks, he said.

“We have a Republican House caucus that is more willing to put political ideology above good public policy and above taxpayers than other states do,” said Brian Coy, a McAuliffe spokesman.

Cox, the majority leader, questioned whether the federal government would keep its funding promise. He said expanding “isn’t inevitable” and that “the more that comes out, the worse it gets.”

It’s “a tragedy” that a fairly wealthy state isn’t acting, said Katharine Webb of the Virginia Hospital and Healthcare Association. The organization backs expansion even though it didn’t support the health-care law, and members are preparing for the worst, Webb said in a telephone interview.

Democrats say they have until June 30 to make their case, and that they’re confident they can avoid a shutdown.

“It’s not going to be easy, it’s not going to be pretty, there’s going to be much wailing and gnashing of teeth, but at the end of the day, we’ll get it done,” said Sen. Donald McEachin, chairman of the Democratic caucus.

–With assistance from William Selway in Washington.

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