Medicaid movement: Republican Terry Kilgore breaks rank, calls for Kentucky model of health care expansion

The House of Delegates has moved closer to a once-unthinkable decision to expand Virginia’s Medicaid program with billions of dollars in federal funds under the Affordable Care Act.

The possibility that Medicaid expansion will be part of the House budget this weekend gained traction on Thursday with a public declaration by Del. Terry Kilgore, R-Scott, that he will support a form of Medicaid expansion to promote a healthy workforce in Southwest Virginia.

Kilgore, who first outlined his position in a Roanoke newspaper column and on a Hampton Roads radio show, said after the House session on Thursday that he favors expanding access to Medicaid benefits for hundreds of thousands of uninsured Virginians as long as they are required to work or seek employment in various ways.

“It’s a conservative approach to expanding Medicaid,” he said in an interview. “It gives people a hand up. Those who are working two or three jobs trying to make ends meet, it gives them the opportunity to get some coverage. I think it is a way forward.”

Kilgore is the first high-ranking House Republican to break ranks from what had been a firewall against expansion under previous House Speaker Bill Howell, R-Stafford, whose retirement in January coincided with a near Democratic takeover of a chamber that had been governed for years with a sizable GOP majority.

Howell’s successor, Speaker Kirk Cox, R-Colonial Heights, has been negotiating publicly and privately with Gov. Ralph Northam over the conditions for allowing expansion of the state’s Medicaid program, beginning with a requirement that “able-bodied” Medicaid recipients seek work, job training or education, or participate in public service.

Cox has laid out six principles for supporting Medicaid expansion, including a work requirement and other cost-sharing responsibilities for recipients.

“Speaker Cox respects Delegate Kilgore’s decision to publicly support a form of Medicaid expansion,” spokesman Parker Slaybaugh said in a statement on Thursday. “The speaker has shared six key principles for the dialogue with Governor Northam and is committed to ensuring conservative reforms, that protect taxpayers, are a part of any potential agreement.”

One of the principles would require the state to procure approval by President Donald Trump’s administration of a waiver for a Medicaid work requirement before accepting federal funds to pay 90 to 94 percent of the costs. Waiver approval could take as long as two years, state officials said.

Proposed budget

Meanwhile, the proposed budget before General Assembly money committees assumes the program would expand to all Virginians earning up to 138 percent of the federal poverty level, less than $17,000 a year, on Oct. 1.

The budget then-Gov. Terry McAuliffe proposed last year also assumes that a new tax on inpatient hospital revenues would pay about $307 million to cover the state’s share of expansion costs in exchange for compensating hospitals and other providers for care of up to 400,000 previously uninsured Virginians.

Northam publicly has opposed a work requirement. However, the new governor, a doctor who hails from the rural Eastern Shore, has expressed an open mind on the issue to House Republicans. This week, they approved a form of work or public service requirement proposed by Del. Jason Miyares, R-Virginia Beach, with significant Democratic support.

Earlier this week, the governor praised the assembly for the progress it made on the issue during the first half of the legislative session.

“I am pleased that the dialogue on how we can best accomplish this goal is still ongoing,” Northam said in a statement after crossover on Tuesday. “I am confident we have the capacity to meet this challenge together, in a way that works for all of us.”

Kilgore’s district in far Southwest Virginia has lost one hospital and seen the merger of two hospital systems serving the region and neighboring Tennessee. He said the federal approval of a work requirement in neighboring Kentucky’s expanded Medicaid program is a model that he favors in Virginia.

“As Governor Northam seeks a solution to provide greater health care access to Virginians, I propose Virginia learn from what Kentucky has done and what the Trump administration supports,” he wrote in an opinion column in The Roanoke Times titled “The next step for rebuilding Southwest Virginia’s economy.”

“By building a bridge with the General Assembly, he will have united the General Assembly behind his vision of ensuring Virginians have coverage that is more affordable, our rural hospitals are more secure, and our workforce becomes even more competitive,” Kilgore wrote. “This is good for our economy, and good for our region.”

House Appropriations Chairman Chris Jones, R-Suffolk, played a lead role in shaping Miyares’ legislation, House Bill 338, which passed the budget committee on a unanimous vote that included 10 Democrats. Earlier this week, 13 Democrats joined 51 House Republicans to approve the legislation.

“It’s very encouraging to see this movement forward,” said Del. Mark Sickles, D-Fairfax, a senior Democrat on the Appropriations Committee. He has proposed a budget amendment that would allow the state to change its Medicaid plan quickly to draw down about $3.2 billion in the next budget to pay for expansion beginning on Oct. 1.

Americans for Prosperity, a vocal opponent of expansion, criticized Kilgore’s decision. “Adding work requirements won’t magically transform Medicaid expansion into a good idea, said AFP-VA State Director JC Hernandez. “Even with work requirements, Virginia still couldn’t afford the added cost to expand Medicaid.”

Senate prospects

The prospects for expansion are much dimmer in the Senate, which four years ago led efforts to expand commercial insurance coverage through Medicaid managed care in the Marketplace Virginia plan that Howell and House Republicans blocked.

Two of the Republicans who led that push, Sens. John Watkins of Powhatan County and Walter Stosch of Henrico County, retired two years ago and were succeeded by Republicans opposed to full expansion, Sens. Glen Sturtevant of Richmond and Siobhan Dunnavant of Henrico.

The third leader of the 2014 proposal, Senate Finance Co-Chairman Emmett Hanger, R-Augusta, confirmed Thursday that the budget that the committee will adopt on Sunday will not include Medicaid, a provider assessment, or $422 million in savings that McAuliffe had estimated in his proposed budget as a result of expansion and a provider assessment.

Dunnavant, an obstetrician, sponsored legislation the Senate adopted this week that proposes to expand Medicaid eligibility for 20,000 low-income Virginians with mental illness, addiction or chronic diseases, as well as about 2,300 people with developmental or intellectual disabilities who are waiting for costly waiver services.

Senate Bill 915 lacks any source of funding to pay for the expanded services, which are contingent on money being included in the budget that the Senate Finance Committee will release on Sunday.

Dunnavant had proposed a tax on hospital revenues to pay for the state’s share of the partial expansion, estimated at $273 million over two years, based on a 50-50 match with the federal government, rather than the 90 percent federal share available under the Affordable Care Act for full expansion.

But Hanger said this week that he opposes what he called “a bed tax” on hospital revenues to pay the state’s share of the costs under either full or partial expansion. Dunnavant then stripped the provider assessment from her bill.

The senator said Thursday that he favors a modified version of Miyares’ work requirement that he thinks would be less expensive to carry out than the Department of Planning and Budget estimated in two fiscal analyses.

“A big percentage of them are the working poor,” he said of childless adults and low-income parents who would be covered by expansion. “They’re already working.”

Hanger said Kilgore’s decision to support expansion with a work requirement could make it easier for other Republican legislators from rural areas with struggling hospitals to accept some form of expanded Medicaid coverage.

“A couple of senators maybe have to think about it,” he said.

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