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Virginia and the ACA’s Medicaid expansion

No Medicaid expansion yet. Governor and public are supportive, but GOP lawmakers want work requirements

virginia Medicaid guide

No Medicaid expansion in Virginia, but that may change in 2018

Virginia has not expanded Medicaid under the Affordable Care Act (ACA), although advocates and Governor Ralph Northam—continuing the work of his predecessor, Terry McAuliffe—continue to push for it. For the time being, Medicaid eligibility guidelines in Virginia are unchanged from 2013, and non-disabled adults without dependent children are ineligible for Medicaid regardless of how low their income is. And according to Medicaid expansion advocates, Virginia is missing out on $142 million in federal funding every month that the state continues to reject expansion.

If Virginia were to expand Medicaid, coverage would be newly-available for about 300,000 to 400,000 of the state’s lowest-income residents.  About 138,000 of them are in the coverage gap, not eligible for Medicaid in Virginia, and also not eligible for premium subsidies because their income is too low. They simply have no realistic option for obtaining health insurance, as their only choice is to pay full price for a private plan, which isn’t possible for most people living below the poverty level.

Subsidies are only available for people with incomes that are at least 100 percent of poverty, because everyone below that level was supposed to get Medicaid. But the Supreme Court ruled in 2012 that states could opt out of Medicaid expansion, and Virginia is one of the 19 states still using the old eligibility rules (Maine voters approved a Medicaid expansion ballot initiative in November 2017, but the state is still working out the details of expansion; once Medicaid is expanded in Maine, there will be 18 states that haven’t expanded Medicaid, including Virginia).

House wants expansion, Senate does not. Regular session ended in an impasse, so lawmakers convene a special session. If expansion is included in the budget, it will have a work requirement.

Governor Ralph Northam was elected in a decisive victory in the 2017 election, and one of his main campaign promises was to expand Medicaid. But as evidenced by former Governor Terry McAuliffe’s four years of trying to expand Medicaid (details below), the state’s lawmakers have the final say. Virginia Democrats gained significant ground in the House of Delegates, but a tie-breaker win went to the Republicans, who now hold a 51-49 majority in 2018.

Legislation (SB 572) was introduced in the Virginia Senate in January 2018 to expand Medicaid (albeit with work requirements and premiums), but a party-line vote in the Education and Health Committee killed it before the end of January. The following week, a House committee voted 14-3 in favor of HB 338, which would impose work requirements on some current Medicaid enrollees in Virginia. HB338 passed in the house in February, with a 64 to 36 vote, but it did not advance in the Senate.

Former Governor McAuliffe’s proposed budget was under review in the 2018 legislative session, and it called for Medicaid expansion — as had McAuliffe’s proposed budgets for the three previous years. In the House, two budget bills — HB29 and HB30 — were considered, and both included Medicaid expansion (HB29 was a short-term budget bill, covering the first half of 2018; HB30 was a two-year budget bill, starting where HB29 ended). Both budget bills passed by a wide margin in the House, with bipartisan support. So the Virginia House of Delegates essentially voted in support of Medicaid expansion three times during the 2018 session, passing HB338, HB29, and HB30 (although HB338 was based on the premise that the state would seek permission from the federal government to impose a work requirement as a condition of Medicaid expansion). 2018 was the first time that the Virginia House had voted in favor of Medicaid expansion — due in large part to the gains that Democrats made in the 2017 election, and the fact that Virginia voters clearly support Medicaid expansion.

The Senate, however, has continued to steadfastly reject Medicaid expansion, and the result was an impasse on the budget. The regular legislation session ended in March with no budget agreement, and considerable tensions between the House and Senate on the issue of Medicaid expansion. Gov. Northam called lawmakers back for a special session that began on April 11, to continue to work on the budget. Lawmakers must have a budget in place by July 1 in order to avoid a government shutdown. Governor Northam proposed a new budget, which is under consideration during the special session via HB5001 and HB5002.

The House Appropriations Committee approved the new budget on April 13, with an enhanced work requirement, designed to get Republicans in the Senate to support the measure (if two Senate Republicans vote yes on a budget with Medicaid expansion, the measure will pass). The budget bills the House passed earlier in 2018 had called for a work requirement, but enrollees would not have been lost their Medicaid coverage for non-compliance. The new budget bill stipulates that the work requirement would be an enforced condition of continued enrollment in Medicaid. The revised budget also allocates funding to help people comply with the work requirement, for programs such a job training.

Medicaid expansion proponents want Virginia to expand Medicaid as called for in the ACA. But conservative lawmakers have insisted on work requirements before they’ll consider expansion. And the Trump Administration has indicated that they’ll be lenient in approving work requirements (and has already done so for Kentucky, Indiana, and Arkansas), which was a non-starter under the Obama Administration.

Work requirements are popular among GOP lawmakers, but the vast majority of Medicaid recipients are either disabled or too sick to work, or else they’re already working, caring for children or elderly relatives, in school, or looking for work. There’s a pervasive myth that Medicaid recipients are able-bodied and not working, but that’s simply not the case.

For now, the future of the Medicaid expansion debate in Virginia remains uncertain, but expansion is much more likely now than it has been in the past. Although expansion in Virginia will undoubtedly come with a work requirement, rather than the no-strings-attached expansion called for in the ACA.

Governor McAuliffe tried to expand Medicaid, but lawmakers foiled his efforts

Governor McAuliffe took office in January 2014, and had long said that Medicaid expansion was one of his top priorities. It was a contentious issue between the Governor and the state legislature, with a government shut-down that loomed in the summer of 2014 because of budget disagreements pertaining to Medicaid expansion.

The “Virginia Way” was advanced in the legislature in early 2014 as a modified approach to Medicaid expansion, but it didn’t go anywhere, as the Republican majority in the legislature continued to insist on Medicaid reform before there’s any possibility of expanding coverage to more people.

Eventually, Governor McAuliffe pulled back from his push for full expansion, settling instead for an approach that would have worked with what the state already had and made some minor expansions that could eventually bring health insurance to 200,000 of the state’s most vulnerable residents.  Governor McAuliffe outlined his ten-step plan in September 2014.

Shortly after that, in mid-September, the legislature convened for a special session on the budget, which included a proposed bill to expand Medicaid.  It was heavily debated during the special session, but was rejected in a 64-33 vote in the House and did not make it to the Senate.

The state Medicaid Director, the Governor, and Democrats in the Legislature (along with one Republican – Thomas Davis Rust of Fairfax) continued to push for some form of Medicaid expansion, and 61 percent of Virginia’s residents supported Medicaid expansion as of late 2014, while only 31 percent opposed it.

In early 2015, Gov. McAuliffe included Medicaid expansion in his budget proposal, but both the House and Senate budget committees rejected that aspect of the budget immediately (although they did include some funding for community clinics and treatment for severely mentally-ill patients). Unlike 2014, when a budget stalemate nearly triggered a government shutdown, the Governor signed the new budget in March 2015, well in advance of the start of the new fiscal year.

The issue of Medicaid expansion was revisited during the 2016 legislative session, but lawmakers once again rejected funding for Medicaid expansion in the budget bill during the 2016 session. McAuliffe vetoed a measure in 2016 that would have exempted direct primary care arrangements from the regulatory oversight that applies to health insurance products, and in issuing his veto, the governor noted that Medicaid expansion would be a much more effective means of ensuring that people have access to affordable, comprehensive health coverage.

[The following year, during the 2017 legislative session, Virginia lawmakers passed H.B.2053 (and the companion senate bill, S.B.800), which exempts direct primary care arrangements from insurance oversight; Governor McAuliffe signed the legislation into law in April 2017.]

In September 2016, Governor McAuliffe reiterated his point that Medicaid expansion would help to close the budget gap that Virginia is facing. When McAuliffe left office in January 2017, Medicaid had still not been expanded in Virginia. But his successor, Governor Ralph Northam, campaigned on the promise of expansion, and Democrats gained considerable ground in the state legislature in the 2017 election, in large part due to the Medicaid expansion issue.

Leaving money on the table

Because Virginia has not expanded Medicaid, the state is missing out on $14.7 billion in federal funding from 2013 to 2022 (state leaders can change their mind at any time; if Virginia expands Medicaid at a later date, the state will start receiving the applicable federal funding at that point).

The federal government paid the full cost of Medicaid expansion through 2016. After that, the states gradually begin to pay a small portion of the cost, but it will never exceed 10 percent. States that have expanded coverage are paying 6 percent of the cost in 2018, will pay 7 percent of the cost in 2019, and their share of the cost will reach it’s highest—and permanent—level of 10 percent starting in 2020.

If Virginia does not expand Medicaid, its residents will pay $10.6 billion in federal income taxes over the first decade of ACA implemenation that will be used to pay for Medicaid expansion in other states, while receiving no federal Medicaid expansion funds for their own state. In effect, Virginia residents are subsidizing Medicaid expansion for the 31 states (and DC) that have already expanded Medicaid.

Who is eligible for Virginia Medicaid?

In addition to low-income elderly residents and those who are disabled, Medicaid is available to the following populations in Virginia:

  • Pregnant women with household incomes up to 143 percent of poverty.
  • Virginia also offers FAMIS – Family Access to Medical Insurance Security – which provides health coverage for uninsured pregnant women who are not eligible for Medicaid but have household incomes up to 200 percent of poverty.
  • Parents with dependent children are eligible if their household income is up to 49 percent of poverty (about $9,700/year for a family of three).
  • Children are eligible for Medicaid if their household incomes are up to 143 percent of poverty.  Above that level, they are eligible for CHIP (Cover Virginia’s FAMIS program) if their household incomes do not exceed 200 percent of poverty.

How do I apply?

2014 enrollment; Virginia uses new reporting method

By mid-April 2014, 48,660 Virginia residents had enrolled in Medicaid or CHIP through HealthCare.gov.  They were eligible based on the pre-2014 enrollment guidelines, but may not have known that Medicaid was available to them.  Medicaid enrollment is year-round, so there is no specific time during the year when people need to enroll.

When CMS released total Medicaid enrollment numbers for August 2014, Virginia’s total was 5.2 percent lower than it was prior to October 2013. But that’s the result of a change in how the state reports the data; starting in August, Virginia stopped including people with limited Medicaid benefits among the total enrollees.

By June 2016, total enrollment in Virginia’s Medicaid program was 968,666, which was 4 percent higher than it had been in late 2013 By November 2017, enrollment had grown to 1,014,094, an 8 percent increase since late 2013.

Virginia Medicaid history

Medicaid became effective in Virginia in July 1969, making it one of the last states in the country to implement the program (the first states to provide Medicaid did so in January 1966).

In late 1991, CMS approved Virginia’s Medicaid waiver application to begin a Medicaid primary care case management program dubbed MEDALLION.  The case management system was a response to escalating costs, increasing use of emergency rooms in lieu of primary care, and physician reluctance to treat Medicaid patients. The managed care model began as a pilot program in five counties, but was considered a success and expanded statewide in 1995. Virginia was also one of the first states to expand the managed care program to include elderly, blind, and disabled Medicaid recipients (these populations had typically always been covered by traditional Medicaid in each state, rather than managed care).

By 1995, in select areas of the state, Virginia Medicaid recipients were able to choose from among a variety of Managed Care Organizations (MCOs) under the Options Program. This was the first time MCOs were used in the Medicaid program in Virginia.

The Medallion II MCO took effect in 1996, and it was gradually expanded across the state. By 2001, there were seven MCO partners in the Medallion II program. In the ensuing years, there have been numerous consolidations, entries, and exits on the part of MCOs. Overall, the state has concluded that MCOs are the most cost-effective way to provide Medicaid benefits to eligible residents.

Virginia created FAMIS (Family Access to Medical Insurance Security) in 2000, following the creation of CHIP (Children’s Health Insurance Program) by the federal government in 1997. FAMIS-eligible families can choose to enroll in available employer-sponsored insurance and receive help with the premiums if that is deemed more cost effective than directly providing coverage through the FAMIS program.

Some ACA savings for Virginia, even without Medicaid expansion

The state is taking advantage of the fact that the ACA allows Medicaid to cover inpatient care for prison inmates, instead of having the Department of Corrections foot the bill. Virginia started doing this in 2014, and it’s estimated to have saved the state about $1 million in the first year, because Medicaid expenses are split with the federal government, while DOC expenses are covered by the state.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

Virginia Medicaid

How to apply

Enroll online at HealthCare.gov or Cover Virginia or by phone at 1-800-318-2596 (HealthCare.gov) or 1-855-242-8282 (Cover Virginia). Mail a paper application to your local Department of Social Services office or apply in person at a Department of Social Services office.

Who is eligible

The aged, blind, and disabled.  Also, parents with dependent children are eligible with household incomes up to 49% of FPL. Pregnant women are eligible with household incomes up to 143% of FPL. Children are eligible for Medicaid or CHIP with household incomes up to 200% of FPL.

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