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Gov. Ralph Northam spoke to nearly 200 people during a rally at Capitol Square on Thursday. The governor planned to meet with budget leaders on Friday morning.

Gov. Ralph Northam asked General Assembly budget leaders on Thursday to produce a two-year state budget by scheduled adjournment in eight days that expands Medicaid coverage for uninsured Virginians, bolsters financial reserves and invests in such priorities as public education.

With the two chambers hundreds of millions of dollars apart, Northam acknowledged that funding of public services will depend on how the House of Delegates and Senate resolve their stalemate over Medicaid expansion and whether the state will realize an estimated $371 million in savings by accepting additional federal money for the program under the Affordable Care Act.

“It is my sincere hope that the General Assembly will finalize a budget before the end of the regular session that expands health coverage to Virginians who need it, achieves structural balance and increased reserves, and invests strongly in priorities that will serve Virginians and grow our economy,” he said in a letter to House Appropriations Chairman Chris Jones, R-Suffolk, and Senate Finance Co-Chairmen Tommy Norment, R-James City, and Emmett Hanger, R-Augusta.

The governor plans to meet on Friday morning with the 13 members of the budget conference committee that will try to bridge what Norment has described as “a chasm” between the two budgets.

Northam presided over the Senate as lieutenant governor the last time the two bodies reached a budget stalemate over Medicaid expansion. That battle in 2014 did not end until June, when the House prevailed in blocking then-Gov. Terry McAuliffe’s first attempt to expand the program. Senate Republicans drove the final nail then by passing an amendment to ensure the Democratic governor could not accept federal money for expansion without the assembly’s approval.

Role reversal

This year, the roles are reversed, with the House adopting a budget that includes Medicaid expansion, a hospital tax to cover the state’s share of the costs, and estimated savings that would be invested in such priorities as K-12 and higher education, treatment of people with mental illness and addiction, economic development and transportation, and compensation for a wide range of public employees.

In contrast, the Senate has refused to accept more than $2.5 billion in available federal money to expand the state Medicaid program and rejected the “provider assessment” on hospitals. It has fashioned what Sen. Steve Newman, R-Lynchburg, calls a “skinny budget” that would spend far less than the House on most services, but would deposit about $90 million more in a new cash reserve.

Northam’s priorities

Northam, elected in a landslide in November elections that also gave fellow Democrats an additional 15 seats in the House, made clear in his three-page letter that investments in education, employee compensation and financial reserves are his top priorities in a budget balanced without gimmicks.

But all of those priorities pivot on the decision on Medicaid expansion, said the governor. Northam led a rainy, midday rally at the Bell Tower in Capitol Square with nearly 200 people supporting the Obamacare-financed extension of health coverage to as many as “400,000 working Virginians,” most of them childless adults or low-income parents.

“We are closer than we have ever been!” Northam told the Healthcare for All Virginians coalition.

Senate GOP opposition

Senate Republicans continued to fight back against expansion on Thursday. They first rejected a House proposal to require current and future Medicaid recipients to work or engage in training, education or public service, and then circulated a tweet by the White House budget director warning the state against expanding a program that President Donald Trump wants to cut.

The Senate Education and Health Committee voted 10-6 to not approve House Bill 338, the “Training, Education, Employment and Opportunity Program,” proposed by Del. Jason Miyares, R-Virginia Beach. Seven of the panel’s eight Republicans attacked it as a pale imitation of the work requirement for Medicaid recipients in Kentucky and Indiana, which expanded their programs under the Affordable Care Act.

“This is a work suggestion — it has no teeth,” said Sen. John Cosgrove, R-Chesapeake, who led the GOP attack after first complimenting Miyares for voting against the House budget that would expand Medicaid on Jan. 1.

“This is really camouflage for Medicaid expansion in Virginia,” said Cosgrove, citing the role of the House Appropriations Committee in revising the legislation as a template for the same requirements in its proposed budget.

Two Democrats joined Republicans in voting against approval of the bill, which the committee then carried over to next year on a 12-3 vote.

“We’ve got other things in mind,” said Senate Minority Leader Dick Saslaw, D-Fairfax, who voted against the bill, along with Sen. Mamie Locke, D-Hampton.

Work requirements bill

The escalating battle over Medicaid expansion in the budget loomed over the discussion on Miyares’ bill, despite his effort to distance his legislation from the larger dispute.

“This is not Medicaid expansion,” Miyares said to begin his presentation.

Currently, Virginia’s Medicaid program only covers children, pregnant women, parents with extremely low incomes, and the elderly and disabled. The elderly and disabled make up about one-third of the $9 billion program’s population and more than two-thirds of its cost.

State budget officials and the Joint Legislative Audit and Review Commission concluded that the proposed work requirement would apply to about 6,200 people in the existing program, after eliminating from the calculation those who are already exempt under existing welfare-to-work requirements in other state programs.

“I don’t say this is perfect,” Miyares said. “It’s much better than what we have, which is nothing.”

Mulvaney’s tweet

Opponents of Medicaid expansion circulated a tweet by Mick Mulvaney, director of the U.S. Office of Management and Budget, who warned, “This administration is committed to addressing the unsustainable growth of Obamacare’s Medicaid expansion.”

Mulvaney cited “an explosion of state and federal spending” under Medicaid expansion, questioned whether the program had improved the health of newly eligible recipients, and contended that expansion had “created a bias in favor of able-bodied adults at the expense of those who truly need medical services.”

“For these reasons, the president’s budget repeals Obamacare’s Medicaid expansion and supports increased flexibility for states to design solutions that best meet the needs of their lower-income and most vulnerable populations,” he concluded.

But Congress has not even begun to consider the budget that Trump proposed on Feb. 12, and Northam’s office said the governor had addressed the issue personally with federal health care officials during the National Governors Association meeting in Washington last weekend.

“They were assured that the Trump administration will continue to evaluate applications for expanded coverage and would look favorably on waivers to connect Virginians with work and incentivize healthy choices,” said Northam spokeswoman Ofirah Yheskel.

“The governor is working in a bipartisan way to expand health care for Virginians who need it, create jobs and bring significant savings to the Virginia budget,” Yheskel said. “The governor is confident that Virginia will join 32 other states and the District of Columbia this year as a state that has recognized the clear benefits of expanded health coverage for its residents.”

Northam has not openly endorsed a work requirement, but he has negotiated with House Republicans over conditions that would include work and related activities as a condition of receiving Medicaid benefits.

“Some people are working one, two, three jobs but can’t afford coverage,” he said at the Capitol Square rally.

In an interview after the rally, the governor said he planned to meet Friday with members of the budget conference committee who will try to bridge the gulf between the House and Senate.

“There’s a lot of jockeying back and forth,” Northam said with a smile.

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