UPDATE 1 – Friday 6:21 PM: Sen. Mark Obenshain has circulated what appears to be a very thoughtful explication of the arguments about how Gov. McAuliffe cannot expand Medicaid on his own. I will study that closely and comment on these pages over the weekend. Until then, a big thank you to Sen. Obenshain for his analysis.
UPDATE 2 – Monday 10:00 PM: My friend Mark Obenshain cited three provisions in support of the proposition that the Governor can’t expand Medicaid on his own. I considered each of these provisions before I published my original post on this subject last week. They are:
1. The Stanley Amendment. Mark correctly notes that the Stanley Amendment operates as a bar on expansion, but as we explained when we urged the legislature to vote no on this new appropriations bill:
If you read that quickly you might think it means that the legislature has to specifically appropriate money to fund Medicaid expansion before it can happen. But if you’re part of a repeatedly lawless administration that has already stated very clearly that it would exploit any potential avenue to “close the coverage gap,” you’d probably prefer to read it another way.
Parsed very carefully, the current budget says that the Governor cannot spend money on Medicaid expansion unless the funds he spends are included in an appropriation bill adopted after July 1. Note that it does not say that the Governor cannot spend money unless it is specifically authorized. Rather, it says that as long as the money spent is included in a new appropriations bill, there is no affirmative bar to its being spent on Medicaid expansion.
So if you’re a Governor who is hell bent on expanding Medicaid, and who has declared he will exploit every available opportunity to do so, regardless of how much you have to push the envelope on the limits of executive power, how do you get around the Stanley Amendment?
First you need an appropriations bill to be passed after July 1.
It’s not that Mark isn’t right. He is. The problem is that Terry McAuliffe has promised he’ll exploit every available potential loophole for him to achieve his #1 goal.
2. Budget section 4-1.02 (b)(1). Here, Mark cites to a provision that addresses reductions in spending the Governor is authorized to make when “expenditure factors, such enrollments or populations in institutions, are smaller than the estimates upon which the appropriation was based.” The appropriations bill passed on Thursday did not make reductions on the basis of such changed factors, and as such, the provisions of 4-1.02(b)(1) don’t apply to the money freed up by those reductions. More applicable, perhaps, is budget section 4-1.05(1):
General fund appropriations which remain unexpended on (i) the last day of the previous biennium or (ii) the last day of the first year of the current biennium, shall be reappropriated and allotted for expenditure where required by the Code of Virginia, where necessary for the payment of preexisting obligations for the purchase of goods or services, or where desirable, in the determination of the Governor, to address any of the six conditions listed in § 4-1.03 c.5 of this act or to provide financial incentives to reduce spending to effect current or future cost savings.
3. Budget section 4-5.03 (1). This is the strongest argument. It cites budget language that says that no state agency can upwardly revise expenditure factors (e.g., adjusting the Medicaid modified adjusted gross income (MAGI) coverage threshold from 100% of the federal poverty line to 133%) without an appropriation. However, the current budget already gives the Governor authority amend the state’s Medicaid plan to do just that:
The Department of Medical Assistance Services shall have authority to amend the State Plans for Medical Assistance under Titles XIX and XXI of the Social Security Act, and any waivers thereof, to implement requirements of the federal Patient Protection and Affordable Care Act (PPACA) as it pertains to implementation of Medicaid and CHIP eligibility determination and case management standards and practices, including the Modified Adjusted Gross Income (MAGI) methodology.
Item 301, NNN(1). (Emphasis added). Mark is right to point this out, though, as under the best reading of the language the Governor should still have to come back for a specific appropriation, even though he’s already been authorized (in an act of appropriation) to upwardly revise the relevant expenditure factor. But unfortunately, this Governor may have no compunction about saying this item gives him all he needs in this regard.
In the end, that’s what this is all about: not what we think the law says, but what Terry McAuliffe thinks he can get away with. Having given him an appropriations bill that may free up significant amounts of funds if revenue collections keep pace with collections so far this year, we failed to take measures that would clearly, unambiguously, and definitively bar him from undertaking any further shenanigans.
When we have a Governor who has promised us in no uncertain terms that he will act to expand Medicaid regardless of how aggressive he has to be in interpreting his authority to do so, I believe it was unwise to not remove all doubt about the question. It puts us in the position of having to guess which individual portions of the law the Governor might possibly try to bend or abuse and then taking him to court to reverse new healthcare coverage for 400,000 people, in an election year for the General Assembly…not exactly an easy thing to do.
I really hope my suspicions aren’t borne out by events.
Republican majorities in both houses of the Virginia General Assembly yesterday rejected bills that would have explicitly expanded Medicaid pursuant to the Affordable Care Act, but passed an act of appropriation that may end up making such bills moot.
Neither the House bill introduced by Tom Rust (R-Fairfax) and Glenn Davis (R-Virginia Beach) nor the Senate bill by Emmett Hanger (R-Augusta) was allowed to come up for a vote. The House bill failed on a motion to bring it to a vote, and the Senate bill was once again set aside for potential later consideration.
The legislature also acted on a number of judicial vacancies, electing a slew of judges from around the Commonwealth. The House also passed a resolution authorizing (but not requiring) the Speaker to hire lawyers to ensure the Virginia Constitution has faithful counsel and to defend legislative prerogatives in the event the Governor oversteps his authority on Medicaid.
However, the main work of this session was passing an act of appropriation. We realize now that the Medicaid bills were always little more than a distraction.
We urged legislators to vote no on this bill. Several members indicated they agreed with us, but in the end, and under extreme pressure to do otherwise, only a handful stood strong against it. Leadership says there is nothing to worry about, and that we’re dealing with a real shortfall in a way that protects our credit ratings. They say that this new appropriation bill isn’t a way to get around the Stanley Amendment passed in June to keep the Governor from expanding Medicaid on his own.
We wanted to trust that the agreement on this appropriation between leadership and the Governor was something we could get behind. But there were a few things that made that trust difficult:
- The public did not find out there was an appropriation bill until Monday, despite the fact that it was secretly being developed for at least a month, and possibly subject to negotiations as far back as June. Why the haste? Why the lack of transparency?
- We understand there is technically a shortfall, but the administration’s own numbers suggest that shortfall will work itself out in short order, as revenues are outstripping projections by 5 points so far this fiscal year. We understand Finance Secretary Ric Brown made much the same point in the Senate Finance committee meeting yesterday.
- Previous Governors handled shortfalls through reversions and other methods by themselves, yet somehow this Governor couldn’t handle the current shortfall without an act of appropriation?
- Not coincidentally, the Governor needed an act of appropriation to get around the Stanley Amendment, which was signed into law in June and acts as an affirmative bar on the Governor’s attempts to expand Medicaid on his own. It appears he may have gotten the appropriation act that he needed.
- The Governor has promised that he will exploit any loophole and stretch his authority to the maximum in order to ensure Medicaid gets expanded. Yet leadership resisted any effort to amend this appropriation bill to ensure the Governor couldn’t do that. Why?
A vote for this bill was a vote of trust in Terry McAuliffe, whose repeated promises to circumvent the legislature on Medicaid expansion make clear that such trust was entirely undeserved.
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Reasonable people can disagree on the question of Medicaid expansion, and I continue to believe there is room in the Republican Party for people like Del. Tom Rust, who favors expansion in a way that would be much more efficient than it has been done elsewhere. I applaud Rust for having the courage of his convictions and for honestly advancing his ideas. I am not an absolutist who thinks anyone who ever strays from conservative orthodoxy is a RINO. But I also think what we witnessed this week, and the weeks and months leading to it, is not an example of good, open, honest, and transparent governance. We can and should do a better job of building trust with voters disillusioned by the governing process.
I have promised certain parties a retraction if it is proven that my suspicions are misplaced. That promise stands. I expect the Governor will act to expand Medicaid on his own. I suspect that will happen sometime after next spring’s primary contests, likely just after the end of the fiscal year, which is why Democrats were beaming like Cheshire cats when the appropriation bill passed yesterday. If events or additional information prove that to be wrong, I will issue a retraction and an apology. In the meantime, I retract a portion of this post: Howell, Norment Outmaneuver McAuliffe on Medicaid and Judges.
Now, on to victory in November!