McAuliffe takes narrower Medicaid path in Virginia after expansion blocked

(Story updated at 7 p.m. ET)

Terry McAuliffe, Virginia's Democratic governor, has given up on his attempt to expand Medicaid on his own without the support of the GOP-led General Assembly. Instead, he is introducing program improvements for those currently enrolled through an executive order and a series of emergency regulations.

He also plans an aggressive outreach campaign to reach those already eligible for Medicaid who have not enrolled while spreading the word about premium subsidies available to others through the federal exchange. Other initiatives the governor plans to launch in the coming months include integrating primary and specialty care for as many as 20,000 uninsured residents with serious mental illness via a CMS waiver.

He also plans to allow the children of low income state employees to join the state's Virginia Family Access to Medical Insurance Security (FAMIS), the state's Children Insurance Program (CHIP) and extend dental benefits to all pregnant women in Medicaid and FAMIS.

“The governor has made some significant progress for people in Virginia that is very much welcomed,” said Ron Pollack, CEO of the national consumer advocacy organization and healthcare reform ally Families USA.

“Improving access to mental health services and dental care are very important,” Pollack said. But, he added, “This still lives a big problem as hundreds of thousands of low income people are in the coverage gap, this means the focus now is on state legislators.”

McAuliffe put up a tough fight to expand Medicaid for an additional 400,000 Virginians making between 100% and 138% of federal poverty level, at one point even holding up the state's budget in hopes that GOP lawmakers would cave in.

When that failed, he contemplated extending the program through executive order. But after a series of talks with the state's attorney general, McAuliffe realized such executive action would not be possible.

“Trust me, if I could do this on my own, I would do it,” McAuliffe said during a Monday news conference.

The state's 100-plus hospitals have campaigned aggressively to persuade state lawmakers to expand Medicaid. The Virginia Hospital & Healthcare Association spent $400,000 on lobbying expenses from April 2013 to May 2014, the Associated Press reported. (Americans for Prosperity, a group that opposes Medicaid expansion and is linked to conservative billionaires Charles and David Koch, reported spending more than $470,000 on lobbying in Virginia during the same period, according to the report.)

“We pledge our support and look forward to working with Governor McAuliffe and the members of the Virginia General Assembly on implementing the 10-point plan as well as finding ways to help more Virginians receive access to the health care they need and deserve,” hospital association President and CEO Sean Connaughton, president & CEO said in a statement Monday.

The House General Assembly has called a special session to begin Sept. 18, McAuliffe is hopeful lawmakers will present a viable alternative to expand Medicaid then, and reiterated that the CMS is willing to be flexible in helping the state cover low income residents with no current coverage options.

He cited the recent expansion of Medicaid in Pennsylvania, as well as Republican governors in Wyoming and Indiana expressing a willingness to expand the program as the reason for his hope that some sort of compromise can be reached.

In the absence of expansion, McAuliffe unveiled a multi-faceted plan that he believes could lead to more Virginians being covered, and better the care for people who already are eligible for Medicaid.

The centerpiece of McAuliffe's plan to cover more Virginians without the assembly's cooperation is an aggressive outreach effort with $4.3 million in federal funds the state had already received from the CMS to promote the Patient Protection and Affordable Care Act and the federal exchange. Virginia obtained the CMS' permission to use these funds for outreach rather than for building a state exchange. The state is hoping to get an additional $10 million from the CMS to aid in outreach.

McAuliffe said this will not only lead to more people getting a subsidized plan on the exchange but also drum up the so-called woodwork effect for Medicaid, which refers increased enrollment as a result of the publicity.

The strategy, McAuliffe said, could lead to 160,000 additional Virginians who are already eligible signing up for coverage. Last year, even though the state did not actively engage in public education or outreach efforts, 216,000 residents signed up for plans via the federal marketplace.

Follow Virgil Dickson on Twitter: @MHvdickson