Virginia Is On The Verge Of Giving Health Coverage To 400,000, But There's A Catch

The price Democrats will have to pay for expanding Medicaid under the Affordable Care Act is a work requirement for beneficiaries.

Virginia’s Republican-led legislature is on the verge of doing something that would’ve been almost unthinkable just a year ago: approving legislation that would use money from the Affordable Care Act to expand Medicaid to as many as 400,000 people.

That coverage expansion would come at a price for Democratic legislators, progressive activists and low-income Virginians, however. Any Medicaid expansion bill that makes it out of the General Assembly will carry with it new work requirements for Medicaid enrollees, a priority for the GOP at large and for President Donald Trump’s administration.

Democrats in the Virginia legislature have tried in vain for six years to persuade their GOP counterparts that accepting federal dollars to extend Medicaid coverage to poor adults is the right thing to do. Accepting a work-requirements policy that would create bureaucratic obstacles to eligible Virginians appears to be the compromise needed to win the bigger fight.

“Most of the Democrats in the Senate are prepared to accept the work requirement in order to get expansion passed,” said state Sen. Janet Howell (D), who represents parts of Fairfax and Arlington counties in Northern Virginia. “We have hundreds of thousands of Virginians who have no health insurance, largely because we in Virginia have a very stingy Medicaid program,” she said.

“My preference would be not to have a work requirement, but I don’t see any way to get expansion passed unless we have one,” Howell said.

Gov. Ralph Northam (D) has neither endorsed the work requirement nor rejected it, but he has said he won’t accept a budget from the General Assembly that doesn’t include Medicaid expansion.

The Medicaid expansion debate in Virginia spans back to 2013, when former Gov. Robert McDonnell (R) rejected Medicaid expansion. Democratic Gov. Terry McAuliffe (D), who served from 2014 until January, was unable to bring the GOP-led legislature around on the issue.

Then Northam won the gubernatorial election and Democrats gained 15 seats in the 100-member House of Delegates last November, altering the course of the debate and setting Medicaid expansion on a path to becoming a reality. The GOP now has a one-vote majority in both chambers of the legislature, and Lt. Gov. Justin Fairfax (D) can cast tie-breaking votes in the 40-member Senate.

“Republicans were really stunned that they lost the 15 seats in the House of Delegates.”

- John McGlennon, College of William and Mary

Thirty-one states and the District of Columbia have implemented Medicaid expansions. Louisiana was the most recent state to do so via legislation when Gov. John Bel Edwards (D) signed a bill in 2016. Maine voters also approved an expansion via a ballot initiative last year, although Gov. Paul LePage (R) thus far has refused to implement it.

Virginia lawmakers are still working out the final form of the work requirement. The latest version, based on the policy enacted in Arkansas last month, would make a person’s Medicaid coverage contingent on them working at least 20 hours a month for the first three months. The minimum number of hours gradually increases, eventually reaching 80 hours a month after a year on the program. There are other means of meeting this requirement, including being enrolled in school or a job-training training program, or volunteering.

Anyone who fails to meet one of these standards for more than three months during a year losses their health coverage and has to wait until the following year to reapply.

There are numerous exceptions in the most recent version of the legislation, including for children, people over 55 years old, people with disabilities, people with “serious mental illness,” women who or are pregnant or have just given birth, those determined to be “medically frail” and people who are the primary caregivers for children or adults with disabilities.

The Virginia House passed two budgets this year that included a Medicaid expansion, with every House Democrat and 19 Republicans voting for the version that passed this month. While most GOP legislators still oppose Medicaid expansion, two Senate Republicans have broken ranks with their leadership and expressed support for it, giving the legislation enough votes to pass the upper chamber.

Sen. Emmett Hanger Jr., who represents portions of the Shenandoah Valley and has expressed support for Medicaid expansion in the past, last month became the first Republican in the upper chamber this year to come out in favor of the policy. Weeks later, Sen. Frank Wagner (R) of Virginia Beach joined him. Both senators cited a work requirement as a prerequisite for their support. House Republicans who voted for expansion with a work requirement pitch it as reforming Medicaid, not simply enlarging it.

The deal is all but done except for some of the details, said Sen. George Barker (D), whose Northern Virginia district covers parts of Fairfax and Prince WIlliam counties and part of Alexandria.

“I don’t think there are any obstacles that are presenting a problem,” said Barker. “I think that once we all sit down together ― and I’ve already talked to some of my Republican colleagues who are on board as well as some others who are on the fence right now ― I feel confident that we can reach agreement.”

The impasse over Medicaid expansion remains the primary reason the General Assembly hasn’t agreed on the state’s two-year budget.

Shifting Politics In The Old Dominion

The work requirement provides Republicans with political cover for changing their position on Medicaid expansion, said John McGlennon, a government professor at the College of William and Mary in Williamsburg.

This newfound support for Medicaid expansion among some Republicans is the result of a mix of other factors, including the party’s poor showing during the House elections last year and specific regional issues, McGlennon said.

“Republicans were really stunned that they lost the 15 seats in the House of Delegates, and they recognize they had to probably do something,” he said. “They were getting a lot of pressure from the medical professionals in Southwest Virginia, where they’re closing hospitals and there’s no funding for clinics and doctors aren’t getting paid.”

As for the minority party in the House, McGlennon said, “The Democrats were willing to pass what the Republican Speaker was willing to swallow.”

And given the growing strength of the Democratic Party in Virginia, Democrats have reason to believe they can simply repeal the work requirement when they eventually take control of the legislature, McGlennon said.

The fact that Trump and Congress failed to repeal the Affordable Care Act last year also is a factor, said Del. David Toscano, who represents the Charlottesville area and is the Democratic Leader in the House of Delegates. “Given that, you have to make the best of it,” he said.

In addition, those Republicans who now support Medicaid expansion also have come around to the Democratic arguments that expanding coverage, coupled with the infusion of federal money that comes with it, will be a boon for Virginia, Toscano said.

“People like the notion of Medicaid expansion because it’s going to help a lot of people get access to health care they wouldn’t otherwise have. So, for them, it is a moral imperative,” Toscano said. “But when you start looking at the numbers, it becomes an economic imperative for the budget because it allows us to do things with federal dollars that we could not previously do.”

Under the Affordable Care Act, the federal government pays at least 90 percent of the cost of those newly eligible for Medicaid. The House-passed bill includes an assessment on Virginia hospitals that would cover the state’s share.

In addition, expanding Medicaid would enable Virginia to reduce spending on other programs that finance health care for uninsured people, freeing up more than $370 million the state can use for other priorities.

“That’s not chicken feed, and it gets used to pay for things like teacher raises,” Toscano said.

And if Virginia’s experience with Medicaid expansion matches that of other states, the incoming federal money would provide a boost to the economy. It could create about 30,000 jobs in the state, according to the Commonwealth Institute for Fiscal Analysis, a Richmond-based think tank.

More Coverage, More Care

The Affordable Care Act calls for Medicaid to be expanded to anyone who earns up to 133 percent of the federal poverty level, which is about $16,000 for a single person. But in 2012, the Supreme Court ruled that states could refuse the Medicaid expansion, leaving uninsured millions the ACA would have covered.

Currently, childless adults who don’t have a disability can’t qualify for Medicaid in Virginia, no matter how poor they are.

Low-income parents are eligible if they make up to 38 percent of the poverty level, which is less than $4,600 a year. Pregnant women earning up to 205 percent of poverty ― about $25,000 ― can sign up for Medicaid or the Children’s Health Insurance Program. Adults with disabilities are eligible for Medicaid if their incomes don’t exceed 80 percent of poverty, or about $9,700, and if their assets are worth less than $2,000.

In Virginia, the proposed expansion would provide coverage to almost 400,000 people, according to the state’s Department of Medical Assistance Services.

“We’re really excited for people to get insurance so that they can get to the specialists they need to get the care that they need for their chronic disease,” said Paula Tomko, executive director of New Canton-based Central Virginia Health Services, which served about 43,000 patients at 16 locations last year.

Tomko said 32 percent of its patients, or 13,000 people, would be eligible for Medicaid under the expansion.

“We see how much difference access to coverage can make in caring for a patient,” Tomko said.

A Bitter Pill

Adding a work requirement to the program, however, likely means fewer people will get help. Kentucky, which this year became the first state to impose such a requirement, estimates that its new work requirement, along with other policies, will reduce the Medicaid rolls by as many as 95,000 people, for example.

“The potential for loss of coverage is going to be significant,” said Cindy Mann, a partner at the consulting firm Manatt Health in Washington D.C., who oversaw the Medicaid program under President Barack Obama. The Obama administration refused to grant states’ requests for work requirements, arguing that limiting benefits to people who are working was illegal under Medicaid’s statutory mandate to provide health care.

The Trump administration opened the door to including a work requirement in January when the Centers for Medicare and Medicaid Services notified states it would consider approving such policies.

“Many of our patients that we’re talking about work one, if not two, jobs.”

- Kay Crane, Piedmont Access to Health Services

Arkansas, Indiana and Kentucky have already received approval for work requirements. Utah, Arizona, Kansas, Maine, Mississippi, New Hampshire and Wisconsin have also applied for them, and other states are sure to follow.

While Trump administration officials and Republicans at the state level tout work requirements as a means to lift low-income people out of poverty and improve their health, there is scant evidence to support these claims. The vast majority of Medicaid enrollees and people who’d be eligible in non-expansion states are working or in families with at least one worker.

“There’s really no indication that the problem is people not having sufficient motivation,” said Mann. “People may lack skill training, people may lack day care, they may lack transportation ― and there is no additional support available.”

The policy also unjustly tars low-income people as “slackers” who refuse to help themselves, said Kay Crane, CEO of Danville-based Piedmont Access to Health Services, which operates community health centers in Southside Virginia, near the North Carolina border.

“Unless you’re in their shoes and you understand their struggle, it’s real easy to sit back and say, ‘Oh, they ought to get a job,’” Crane said. “Many of our patients that we’re talking about work one, if not two, jobs just to put food on the table.” Forcing them to prove they’re working could merely tie them up in red tape, making it difficult even for people who qualify for Medicaid to get and keep it, she said.

Implementing and enforcing work requirements also is expensive for states. The version adopted by the Virginia House of Delegates, for instance, will cost the state $21.5 million over two years, according to data compiled by the Commonwealth Institute for Fiscal Analysis.

But if this is what it takes to ensure that hundreds of thousands of Virginians gain access to health care, it’ll be worth it, Tomko said. “I would rather work through an onerous process for these folks to have access than not have it.”

Isabella Carapella/HuffPost

Clarification: Language in this story has been amended to reflect that state Sen. Emmett Hanger Jr. supported Medicaid expansion in Virginia in the past.

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