Obamacare Battle in Virginia Mirrors National Fight
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The Fiscal Times
April 11, 2014

There’s a Democrat at the head of the executive branch, Democrats in charge of the Senate, and a strong Republican majority in the lower house. A budget battle, sparked by disagreements over the Affordable Care Act, threatens to shut down the government.

If you assumed this was a story about Washington, DC, you can be excused, but it isn’t. The scenario is currently playing out about 100 miles south of the nation’s capitol, in Richmond, where the Virginia legislature is now a month past the deadline for approval a budget for the coming fiscal year.

Related: Obamacare Signups Climb to 7.5 Million

Because the Supreme Court’s decision two years ago declaring the legality of the ACA made it optional for states to accept federal dollars for an expansion of Medicaid, there have been debates in multiple state capitols over whether to accept the money. Nowhere has the debate been more intense than in the Old Dominion, where Medicaid expansion would provide insurance to as more than 250,000 currently uninsured low-income adults.

Knowing that a Medicaid expansion would never get through the Republican House of Delegates on its own, Democrats in the state Senate made it part of the must-pass annual budget bill. The result is a standoff that has forced the legislature into a special session, and left cities and counties unable to plan for the next fiscal year because they don’t know what the state’s contribution to their budgets will be. If legislators don’t reach a budget deal by July 1, the state government will have to shut down.

“Holding the budget hostage over one issue is wrong,” said House Majority Leader Kirk Cox, a Republican. “Republicans and Democrats disagree on Obamacare. We disagree on Medicaid expansion. But we should agree on a budget. 

Tough luck, said Senator Dick Saslaw, the fiery Democrat who serves as Senate Majority Leader. He said the Republicans’ resistance to the expansion has been steadily losing support. “The only people they’ve got left on their side are the Cato Institute, NFIB, and Rush Limbaugh,” he said, referring, in order, to a libertarian Washington think tank funded by the Koch brothers, the National Federation of Independent Businesses, and a conservative radio talk show host.

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“We’re not voting on a budget that doesn’t have it,” Saslaw said. “That’s not negotiable.”

This kind of pitched battle over Obamacare isn’t new in Virginia.

When the law passed in 2010, then-state Attorney General Ken Cuccinelli practically sprinted to the Federal Courthouse in Richmond in order to be the first AG to file a lawsuit challenging the constitutionality of the Affordable Care Act. Cuccinelli would go on to run for governor with a campaign that played heavily on his objection to Obamacare. He lost to Democrat Terry McAuliffe in November, but suffered from second-hand scandal, as the incumbent Republican governor, Bob McDonnell, was being investigated for corruption. 

Under the ACA, the portion of the population too poor to afford coverage sold by private companies on the health care exchanges, but earning too much money to qualify for traditional Medicaid, was meant to be covered by the expansion of Medicaid’s eligibility requirement to people with earnings up to 138 percent of the federal poverty level.

Related: Two New Studies Raise Red Flags on Obamacare

The Federal government would pay the full cost of the expansion for three years, and afterward its contribution would gradually be scaled back to 90 percent of the cost. In 2012, the Kaiser Foundation determined that if Virginia were to opt not to expand Medicaid, the state would be leaving about $14.7 billion in federal payments on the table over a decade.

Republicans in the House of Delegates say that the state’s Medicaid program is already on precarious financial footing. What’s more, they don’t trust the federal government to continue funding the expansion once it takes root.

“The current Medicaid program is simply unsustainable,” said Matthew Moran, spokesman for Republican Bill Howell, the Speaker of the House. Noting that the program has exploded in size in recent years, he said, “Until we get the growth of the current program under control it doesn’t make financial sense for Virginia to expand Medicaid.”

Additionally, Republicans in Richmond argue, the GOP in Washington seems intent on eliminating much of the federal support for Medicare. On Thursday, the House of Representatives approved a budget drafted by House Budget Committee Chairman Paul Ryan (R-WI) that would eliminate open-ended federal support of the program by transforming Medicaid into a block-grant program that provides fixed payments to the states.

Related: Obamacare is a “Haves and Have-Nots” Health Care System 

If that should happen after Virginia expands eligibility, they argue, the state would be on the hook for billions of dollars it doesn’t have to spend.

This argument aggravates State Senate Majority Leader Saslaw, who points out that the legislation Democrats pushed through the Senate contains language that specifically says that if the Federal government withdraws funding, the program will be terminated. 

Saslaw believes the Republicans’ position is purely motivated by politics.

“This whole thing is about essentially giving the finger to the president and the ACA,” he said. “And fear of the Tea Party, which has a death grip on them. Every time one problem is resolved they find something else,” Saslaw complained, “Albert Einstein could be standing in front of that crowd explaining that two plus two equals four. But if they’ve made up their mind it equals five, he wouldn’t change a single mind.” 

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A longtime reporter on the intersection of the federal government and the private sector, Rob Garver is National Correspondent, based in Washington, D.C. He has written for ProPublica, The New York Times and other publications.