Governor Bob McDonnell is a fan of Medicaid expansion. Don’t believe me? All you have to do is take him at his word. The big question now is, does the Governor end the term with a bang, by expanding Medicaid via unilateral exercise of executive power?
This is a bit of a long post, but here’s the synopsis: Gov. McDonnell supports Medicaid expansion with the implementation of certain reforms that have largely already been completed. He also asserts that he retains the authority to expand Medicaid under Obamacare unilaterally, without further action by the legislature. If he doesn’t move to do this now, then the future of his project to expand Medicaid becomes uncertain. Moreover, politically this is a plus for him and the kind of legacy he apparently wishes to leave behind. I hope I’m wrong about what might happen, and that instead the legislature exerts its proper control over this issue. We shall see soon enough.
THE “REFORM THEN EXPAND” MANTRA
It probably comes as a surprise to most people reading this that Bob McDonnell actually favors expansion of Medicaid in Virginia under Obamacare. But it’s true, and has been true ever since the (Un)Affordable Care Act was signed into law. The key to understanding this is to read through the spin.
In June of 2012, the Supreme Court handed down its big Obamacare ruling, holding that the individual mandate was a legitimate exercise of Congress’ taxing power. You may also recall that same ruling invalidated the state mandate, which had required the states to accept Medicaid expansion. The ruling made it clear that expansion in the states was now voluntary—entirely at each state’s own discretion. Gov. McDonnell apparently did not like this, and in the days after the ruling he continued to hold forth that he was still obligated to keep moving forward with the necessary state level planning and administration of Medicaid expansion. McDonnell was so insistent about not having a choice to not expand Medicaid that PolitiFact gave him a “Pants On Fire” rating. You see, the mandatory aspect prior to the Supreme Court’s ruling actually gave McDonnell cover to do something he wanted to do. After the ruling, he was in a bind.
Think I’m being too hard on the Governor? Compare and contrast Gov. McDonnell with another governor who actually opposes Medicaid expansion, Louisiana Gov. Bobby Jindal. Just a day following the Supreme Court ruling, Jindal pledged he would not take any steps as governor to “implement Obamacare.” Governor McDonnell, meanwhile, gave birth to the “reform and then expand” mantra just weeks after the Supreme Court’s ruling, telling WTOP that “Without significant reform…it would not be responsible to expand Medicaid.” Rather than follow Gov. Jindal’s example, McDonnell did quite the opposite, and had his administration work feverishly to develop modest reforms that would be acceptable to the Obama administration. And while Jindal recently essentially said that Medicaid would expand in Louisiana over his dead body, the McDonnell administration is working hand-in-glove with the Obama administration—since at least fall 2012–to see that we’re ready to take on this massive new entitlement in Virginia. Simply put, if McDonnell were truly against Medicaid expansion, we wouldn’t even be having this conversation.
Still, many Republicans think McDonnell is with them on this issue, and opposed to Medicaid for all the right reasons. Democrats, though, know better. They know that McDonnell needs reforms to shield him from criticism and accountability from within his own party. See, for example, this piece at Blue Virginia, from back in January.
EXECUTIVE POWER GRAB?
The budget signed into law last spring authorized the Medicaid Innovation and Reform Commission (MIRC) to evaluate whether certain delineated reform requirements have been met, and if 3 of the 5 representatives from each of the House of Delegates and Virginia Senate agree that they have, expansion of Medicaid is automatic. The language in the budget is very clear on this point:
If the Medicaid Innovation and Reform Commission determines that the conditions in paragraphs 2, 3, 4, and 5 [the proposed reforms] have been met, then the Commission shall approve implementation of coverage for newly eligible individuals pursuant to 42 U.S.C. § 1396d(y)(1) of the Patient Protection and Affordable Care Act [Obamacare]. Upon approval by the Medicaid Innovation and Reform Commission, the department shall implement the provisions in paragraph 6.a. of this item by July 1, 2014, or as soon as feasible thereafter.
There is hereby appropriated sum sufficient nongeneral funds for such costs as may be incurred to implement coverage for newly eligible individuals pursuant to 42 U.S.C. § 1396d(y)(1) of the Patient Protection and Affordable Care Act [Obamacare].
(Emphasis added). This is important, as there appears to be a misconception among some that the issue of Medicaid expansion would necessarily be required to be taken up by the General Assembly in order for expansion to occur. That is not the case because, as you can see from the bolded text above, the budget also contains the necessary appropriation. Once MIRC votes that the reform conditions have been met, that’s it…we have Medicaid expansion under Obamacare in Virginia, with the executive branch required to expand coverage “as soon as feasible thereafter.”
The good news is that, as the MIRC prepares for its scheduled meeting next Tuesday (importantly, one day after Governor McDonnell releases his final budget proposal), the members of MIRC from the House side appear to have coalesced into solid opposition to expansion. The Bull Elephant has learned from one member from the House side that Republicans on the panel believe they have an objective basis to say the reform requirements have not been met. Further, this member believes a majority of the House Republicans on MIRC are solidly against expansion and will vote down any proposal to expand at next week’s meeting. This is consistent with what Speaker Bill Howell and several other General Assembly Republicans have been saying in recent weeks.
The bad news is that neither the statute creating the MIRC nor the budget that delineated its ability to vote to expand Medicaid do anything to strip the Governor (via his appointees) of the power he has to move forward with expansion. In other words, the executive branch had sole purview over the state administration of federal dollars in accordance with the state’s federally-approved Medicaid plan, and the establishment of MIRC only created a parallel mechanism to expand Medicaid coverage, not an exclusive one. The Governor’s authority on this question was widely acknowledged during the budget debate on this language, and was asserted by the Governor himself in a letter to HHS Secretary Kathleen Sebelius after the budget passed (i.e., that “the decision currently rests with me on whether or not to expand“).
Republican legislators to whom The Bull Elephant have spoken have acknowledged this is a legal soft spot, but believe they have strong Constitutional arguments (and a tight grip on next year’s budget and every other piece of legislation) to dissuade Governor McAuliffe from taking this approach. But unlike McAuliffe, Bob McDonnell has no need to be able to work closely with the legislature again. The General Assembly in its next session could act to reverse the expansion (or de-fund its continuation), but expansion opponents would likely have little means to do so unless they had a veto-proof majority. Instead, opponents would be left with the unsavory and uncertain route of constitutional litigation to strip coverage from those granted it by the executive.
THE CREIGH DEEDS EFFECT
Gov. McDonnell’s actions over the last 18 months have all indicated he is eager to expand Medicaid, particularly if it can be claimed that in doing so it will not affect Virginia’s budget. If he wants to escape the cloud of scandal that has plagued him for most of this year (and soften his image in front of potential judges and jurors), and to truly leave a lasting positive legacy (from his perspective, anyway), he could act unilaterally to expand Medicaid by directing state HHS Secretary Hazel and the Department of Medical Assistance Services (DMAS) to implement the reforms that have been approved by the Obama administration, and to expand coverage as allowed under federal law.
If Gov. McDonnell does this, he will justify his actions by saying that it is imperative that the reforms put in place by his administration not be lost or discarded under a McAuliffe administration. He will say the only way Medicaid expansion can be handled responsibly is to protect the work Secretary Hazel and DMAS have done by expanding coverage immediately beginning January 1st. He will say that delaying the inevitable expansion past January 1 leave tons of federal money on the table, potentially costing the state economy billions of dollars of new spending. And in a move to tug the heartstrings, McDonnell will also highlight the supposed necessity of Medicaid expansion to assist in preventing the kinds of tragedies that recently struck his colleague and former rival for Governor, Sen. Creigh Deeds.
THE KEY TAKEAWAYS
Am I certain that this is the way things will play out? Absolutely not, but I do think it is a real possibility that Governor McDonnell could take this extraordinary action to protect his pet project and his legacy. We should have a clue to his intentions Monday or Tuesday, after his 2014 budget has been released.
In truth, I hope I am wrong. I hope that we can actually have a real, reasoned, open, and honest debate about Medicaid expansion in the legislature, which is the way this issue should have been handled from the beginning. But if McDonnell does not act to initiate expansion of coverage under Obamacare, the next thing conservatives should aim for is action to strip the MIRC of its power to expand Medicaid and put that responsibility back in the hands of the whole legislature, where we have Speaker Howell to serve as a bulwark against expansion of this disaster of a policy.
On Medicaid expansion… There is no such thing as a bigger government program that costs less, works better and creates jobs. #Bridge4Sale
— William J. Howell (@SpeakerHowell) December 4, 2013
I fear that if the legislature is unable to get its act together and take ownership of this responsibility, then Medicaid expansion in the McAuliffe administration becomes the object of intense deal-making surrounding the votes of just three Republicans on the House side of MIRC. As much as I respect the members of that commission, I think Virginia’s voters deserve much better odds–and loads more transparency and accountability–than that.