House panel adopts work rule for Medicaid, dismisses state fiscal analysis

A Republican-controlled committee in the House of Delegates has endorsed a new set of rules for “incentivizing community engagement and employment” among current Medicaid recipients who are able to work, setting the stage for a possible compromise with Democrats on a budget plan to expand health coverage to hundreds of thousands of uninsured Virginians.

The House Rules Committee voted 14-3 on Tuesday to adopt a substitute bill that would require the state to seek federal approval of work requirements for current participants in Virginia’s Medicaid program, which Republican leaders say is a condition of their support for expanding eligibility and accepting federal money under the Affordable Care Act.

“We have got to be about helping people and not just be only about how many people we put on the Medicaid rolls,” said House Speaker Kirk Cox, R-Colonial Heights, who accused Gov. Ralph Northam of trying to thwart a work requirement by asserting an inflated cost to the state for carrying it out.

A state fiscal analysis said the proposal would cost more than $10 million to administer in the first year alone.

Ofirah Yheskel, a spokeswoman for Northam, said in an email that an updated fiscal analysis is in the works.

“The original fiscal impact statement was unintentionally based on incomplete information,” Yheskel said. “We have communicated that to the speaker’s office and will submit a revised fiscal impact statement in response to changes that have been made to the legislation.”

Three Democrats on the committee voted in favor of House Bill 338, proposed by Del. Jason Miyares, R-Virginia Beach, which now will go the House Appropriations Committee as one of its tools for fashioning a potential compromise on Medicaid expansion in the two-year state budget.

“I believe we ought to make every effort to move the needle toward Medicaid expansion,” said Del. Luke Torian, D-Prince William, the ranking Democrat on the Appropriations Committee and a surprise pick to chair one of its subcommittees.

Torian, who initially voted no but then switched, was joined in supporting the bill by Del. Kenneth R. Plum, D-Fairfax, the senior Democrat in the chamber, and Del. Betsy Carr, D-Richmond, who also changed her initial vote on the bill.

“I voted for it in order to advance the negotiations,” Plum said.

Del. Charles Poindexter, R-Franklin County, introduced a similar bill but asked the committee to table it.

The substitute endorsed by the committee would seek a far less stringent work requirement from the administration of President Donald Trump than the original bill. The substitute expanded the number of exemptions from the work requirement from four to seven and added almost a dozen other provisions for satisfying the rule — from participating in job skills training and searching for work to engaging in community work or service, or caring for a disabled, non-dependent relative.

Proposed work rules

Miyares’ substitute also would set an escalating scale of work rules, requiring five hours a week of work after the first three months of receiving Medicaid benefits and rising to commitments of 10, 15 and finally 20 hours after a year in the program.

“I think there’s a lot of room here for talking about how to expand coverage to 400,000 people,” said Jill A. Hanken, senior attorney at the Virginia Poverty Law Center.

However, the vote on the substitute did not dispel a growing confrontation between Cox, who this week signaled for the first time his willingness to consider expanding Medicaid, and Northam, who has publicly endorsed a “straightforward” approach to expansion that would encourage recipients to find work, but not require it.

The new speaker sent a terse letter to the new governor Monday that warned against a rigid position that would exclude a work requirement or other conditions on Medicaid recipients.

“If your position is to pass straightforward Medicaid expansion without work requirements or other reforms, then you will be responsible for the failure to provide health care coverage to more Virginians,” Cox told Northam in the letter.

The governor responded with a letter to Cox on Tuesday, accepting the speaker’s invitation for a dialogue on health care between Republicans in the assembly and the Northam administration.

“As those conversations begin, I hope you will agree to address the biggest issue first by working with my team to expand coverage in a way that works for Virginians, our businesses and our budget,” the governor said. “We can and should discuss how to make our Medicaid program more efficient and more effective for the families it serves, particularly in light of the new participants and new revenue that will be introduced as we expand the program.

“If we work together, we can get more Virginians the coverage they need to lead healthy and productive lives, we can give our hospitals in rural communities the support they need to survive, and we can take real steps together to end our addiction crisis,” Northam said.

Cox faults state analysis

Cox said Tuesday that he is “extremely displeased” by the fiscal impact analysis performed on Miyares’ bill by the Department of Planning and Budget, which asserted that the proposal wouldn’t apply to any of the 1 million Virginians currently covered by Medicaid and would cost more than $10 million to administer in the first year.

The estimate “does not pass the smell test,” the speaker said.

Cox went further in remarks after the meeting.

“If we’re going to negotiate in good faith, don’t come out with a fiscal impact statement that arguably has the intent of trying to kill the bill,” he said.

The fiscal analysis even raised eyebrows among some Democrats.

“I agree it sounds high,” said Del. Mark Sickles, D-Fairfax, a member of the Appropriations Committee who is proposing two different paths to expansion.

The governor’s office quickly acknowledged that the initial analysis was incomplete and promised to revise it.

“We appreciate the administration admitting the initial fiscal impact statement was completely wrong,” responded Parker Slaybaugh, a spokesman for Cox. “However, it is still unclear what type of vague ‘efficiencies’ the governor is referencing. We would like to see a commitment to basic reforms such as requiring able-bodied people to work before receiving Medicaid benefits.”

Some Democrats already are moving toward a compromise on the issue.

Sickles has proposed a budget amendment that has caught the eye of House Appropriations Chairman Chris Jones, R-Suffolk, who has made clear that he intends to address Medicaid in the budget rather than in legislation.

Jones noted that Sickles proposes to amend the state Medicaid plan to expand the program with a number of conditions. They include co-payments for medical services and “incentives to encourage employment for individuals who are unemployed, not attending school as full-time students, not receiving unemployment compensation or Social Security disability benefits and not caring for dependent family members under 12 months of age or a disabled family member of any age.”

“Those are common-sense requirements,” Jones said.

Sickles said he doesn’t thinks Miyares’ bill would affect many current Medicaid recipients, most of whom are children, pregnant women, elderly or disabled.

He sees the work-search requirements for state unemployment compensation and family welfare benefits as potential models for similar rules in Medicaid.

His proposal would have the advantage of allowing the state to expand Medicaid quickly and accept more than $3.2 billion in federal money for the pending two-year budget, rather than seeking lengthy federal approval of a waiver.

Defining work rules “is going to be one of the primary points of negotiation,” Sickles said. “What’s it mean?”

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