House and Senate Pass Historic Budget with Medicaid Expansion

After almost two months of waiting, the General Assembly has passed a historic budget that expands access to Medicaid for more than 300,000 Virginians. It took a five-year fight in Richmond to get this done, and the battle could not have been won without the efforts of so many Virginians who pushed, especially at the ballot box, for this initiative.

Republican leadership in the Virginia Senate attempted to hold the budget hostage over this issue. Ultimately, they were foiled by members of their own caucus like Emmett Hanger and Frank Wagner, who were willing to expand Medicaid not simply because of human benefits, but because of how the additional federal dollars would help with our state budget. In fact, Virginia’s Medicaid has been expanding for years, but in the most fiscally irresponsible manner. Under the present program, the federal government matches our spending on a one-to-one basis. For every dollar we spend, they match it with a dollar. Under Medicaid Expansion, the federal government will pay over ninety percent of the costs of the new enrollees. This is a much better financial deal for the Commonwealth. Republicans also recognize that the Affordable Care Act is not likely to be repealed, so they concluded it would be better for us to bring billions of tax dollars that Virginians pay to Washington back to the Commonwealth to help Virginians with health insurance and to shore up our budget. Since this debate began five years ago, the Commonwealth has lost in excess of $10 billion. Though Virginia can never get that money back, we will now receive those federal funds going forward. Finally, expanding Medicaid coverage means that indigent care at state hospitals for people in the “gap” between Medicaid and the ACA health insurance marketplace (a cost covered 100% by state funding) will become part of our Medicaid program under the 90-10 payment formula. This allows the legislature to use those freed-up state general fund dollars for other purposes, such as teacher raises and greater investments in education and mental health.

Greater Investments

In fact, the robust budget that we passed could not have happened without accessing these federal dollars. For example, in the K-12 area, not only were we able to fully fund the Standards of Quality rebenchmarking (some $481 million), but Medicaid expansion allows us to contribute more lottery money directly to schools, giving them more flexibility for how they invest. This budget also deposits additional revenues into the “Rainy-Day” Fund, which will help Virginia maintain our Triple-A bond rating and allow us to borrow money at lower costs to the taxpayer. The budget includes what has been labeled as a “provider assessment,” a vehicle by which hospitals will help contribute to the state’s portion of costs of expanding Medicaid; these monies will be placed into a “lockbox” so they cannot be accessed for any reason other than for healthcare.

Medicaid Expansion allows this budget to contribute millions of dollars to aid community mental health services and expand funding for the very successful STEP program, an innovative initiative for individuals with behavioral health disorders to access services faster and in a more effective way. We are also able to expand waiver slots for people with disabilities, to provide them better care in community-based settings.

Additional Initiatives Funded

The budget includes several items that I proposed this session. It includes $1 million to reduce the wait list for services to be provided to the elderly in their homes, something critical to our friends and relatives to ensure a high quality of life in their later years. It also contains my proposal to fund a study into how Virginia can encourage use of energy storage systems, including batteries, so we can further expand use of renewable resources in the Commonwealth.

Pay Raises for State Employees

The budget includes a 3 percent teacher salary increase effective July 1, 2019, and another $11.1 million to fund the Virginia Preschool Initiative. Other state and state-supported employees will receive a 2 percent salary increase at the beginning of the fiscal year.

Budget Includes Reductions

No budget is perfect. There are cuts in capital funding for transit and some reductions in the enhanced funding for higher education that were in the initial House budget that I do not like. Despite these concerns, this budget is probably the best I have seen in my twelve years in the General Assembly. I was happy to advocate for it on the House floor and vote for its passage. The bill passed 67 to 31, with all 48 Democrats present voting for it, and 19 Republicans supporting it. The budget now goes the Governor, who can either sign it or make some changes and send it back to us within the next seven days.

May 30, 2018, will be remembered as a great day in the history of the Commonwealth, and it was a great honor to participate in it.