Virginia expanded Medicaid as of January 2019. By August 2020, more than 450,000 were enrolled

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In late May 2018, Virginia lawmakers passed a budget ( HB5002 and HB5001 ) that called for the expansion of Medicaid starting in January 2019, albeit with a work requirement that was expected to take effect at some point in the future, after approval by the federal government (as described below, the state paused the process of implementing a work requirement in late 2019; work requirements are not in effect anywhere in the country as of 2020). After pushing for Medicaid expansion since taking office, Governor Northam hailed the budget as a victory when he signed it into law.

Medicaid is now available to Virginia residents earning up to 138 percent of the poverty level (in 2020, that’s about $17,609 for a single person, and about $29,973 for an adult in a household of three people). The state created a website with frequently asked questions and additional information about the expansion of coverage, and enrollment began November 1, 2018, for coverage that took effect January 1, 2019. By January 2020, more than 375,000 people had gained coverage under the expanded eligibility guidelines. Enrollment increased sharply in 2020, due in large part to the job losses caused by the COVID-19 pandemic. By August 2020, enrollment in Virginia’s expanded Medicaid stood at 452,271 people.



COMPASS waiver proposal (work requirement, premiums, cost-sharing) was officially withdrawn by Gov Northam in 2020

Virginia unveiled its waiver proposal for the work requirement (and other modifications) in September 2018. After a public comment period and public meetings, the final waiver proposal (called COMPASS) was submitted to CMS in November 2018. In early December 2019, a few weeks after Democrats swept the election in Virginia (they control both the House and Senate as of 2020), Virginia’s Medicaid Director, Karen Kimsey, notified CMS that the state was formally delaying the negotiations for the work requirement. And during the budget approval process in the 2020 legislative session, lawmakers eliminated the COMPASS requirements (work requirement, premiums, etc.), paving the way for Gov. Northam to officially withdraw the work requirement proposal in July 2020.

GOP lawmakers were already frustrated by the fact that although Medicaid expansion took effect in January 2019, it had appeared that it could be a year or two later before a work requirement took effect. The work requirement was the feature that convinced some Republican lawmakers in Virginia to support the Medicaid expansion proposal in 2018, and their view was that Medicaid expansion was inherently contingent on the work requirement being implemented — but negotiations with the federal government can take many months.

So it was not surprising that the decision to pause the negotiations over the work requirement was not well received by Republicans in Virginia’s legislature, who expressed dismay that what they had considered an ironclad promise had been broken.

But work requirements in Arkansas, Kentucky, and New Hampshire had already been overturned by the courts. Indiana paused their work requirement due to a lawsuit. And Arizona indefinitely postponed their work requirement due to the court cases in other states. By early 2020, there were work requirements in effect in just two states — Michigan and Utah. And within a few months, both had been suspended (Michigan’s was overturned by a judge, and Utah’s was suspended due to the COVID-19 pandemic).

The primary concern among consumer advocates is that Medicaid work requirements, by design, cause people to lose coverage. Medicaid is a health coverage program, not a jobs program. So new rules and requirements that cause people to lose coverage are inherently at odds with the program’s purpose. And to address the COVID-19 pandemic, the federal government is giving states additional federal matching funds for their Medicaid programs. But that money is contingent on states not terminating coverage for enrollees, which essentially does away with the possibility of a Medicaid work requirement being enforced for the time being.

Medicaid work requirements tend to seem like “common sense” to people who aren’t well-versed in public health, and they have certainly gained significant support among GOP lawmakers in various states. But most people who receive Medicaid, including those eligible under Medicaid expansion, are already working, in school, caring for children or disabled family members, or unable to work for a variety of reasons (disability, mental or physical illness, etc.). And there is no getting around the fact that Medicaid work requirements (and the associated reporting requirements) cause people to lose coverage. They are also expensive for the state to administer. Taking all of that into consideration, the state has opted to skip the Medicaid work requirement for the time being, and just proceed with Medicaid expansion as called for in the ACA.

What Virginia’s COMPASS waiver would have implemented, including a work requirement and premiums

In July 2020, Virginia officially withdrew its COMPASS waiver proposal. But it’s useful to understand what had been proposed. The waiver proposal the state had sent to the federal government in late 2018 called for non-disabled adults to have to work (or be in school or participating in other community engagement activities) in order to be eligible for Medicaid. The state has proposed phasing in this program, dubbed the Training, Education, Employment and Opportunity Program, with a work requirement starting at 20 hours per month in the first three months a person was enrolled, and ramping up to 80 hours per month by the time a person has been enrolled for 12 months.

The budget Virginia passed in 2018 also called for people with income between 100 and 138 percent of the poverty level to pay premiums for their Medicaid coverage, as well as cost-sharing “designed to promote healthy behaviors such as the avoidance of tobacco use, and to encourage personal responsibility and accountability related to the utilization of health care services such as the appropriate use of emergency room services.” Details are in the state’s proposed waiver: Enrollees would have had to pay $5/month if their income was between 100 and 125 percent of the poverty level, and $10/month if their income was between 126 and 138 percent of the poverty level.

Medicaid premiums and cost-sharing, like work requirements, are a favorite of conservative lawmakers who see them as a way to ensure that enrollees have “skin in the game.” Such measures are controversial, however, as they can serve as a barrier for low-income people to be able to maintain coverage and afford necessary health care. Ultimately, these provisions are no longer under consideration for Virginia, as the COMPASS waiver proposal was withdrawn.

Also in July 2020, however, Virginia did gain federal approval for a new “supportive employment and housing benefit” for the state’s Medicaid program. But the punitive measures the state had been pursuing in 2018 are no longer on the table.

The impact of Medicaid expansion

An estimated 400,000 people were expected to become eligible for coverage under the expanded guidelines, but that number is higher now that the COVID pandemic has caused widespread job losses. By early 2020, about 375,000 people had gained coverage under the expanded eligibility guidelines. By August 2020, however, that number had grown to more than 452,000 people. If and when the job market rebounds, some of those individuals will transition away from Medicaid.

About 138,000 people were previously in the coverage gap, not eligible for Medicaid in Virginia, and also not eligible for premium subsidies because their income was too low (ie, under the poverty level). The expansion of Medicaid made coverage realistically available to this group. And people with income between 100 percent and 138 percent of the poverty level, who were previously eligible for significant premium subsidies and cost-sharing reductions in the exchange, became eligible for Medicaid instead as of 2019, with far lower out-of-pocket costs.

According to Medicaid expansion advocates, Virginia had been missing out on $142 million in federal funding every month since the start of 2014, as a result of not expanding Medicaid. But that changed in 2019, when federal Medicaid expansion funding started to flow into the state. States pay 10 percent of the cost of Medicaid expansion, and the federal government pays 90 percent. This is a much more generous split than regular (non-expansion) Medicaid funding.



Medicaid expansion: How it came about in Virginia

Governor Ralph Northam—continuing the work of his predecessor, Terry McAuliffe—had pushed for Medicaid expansion since taking office in January 2018. Several days before lawmakers passed the budget with Medicaid expansion included, Northam had vetoed bills that would have expanded access to association health plans, lengthened short-term health insurance plans, and expanded eligibility for catastrophic health plans. In his statements regarding the vetoes, Northam noted repeatedly that the best thing Virginia could do to stabilize the insurance market and make coverage available to more people would be to expand Medicaid.

Governor Northam was elected in a decisive victory in the 2017 election, and one of his main campaign promises was to expand Medicaid. But as evidenced by former Governor McAuliffe’s four years of trying to expand Medicaid (details below), the state’s lawmakers have the final say. Virginia Democrats gained significant ground in the House of Delegates, but a tie-breaker win went to the Republicans, who held a 51-49 majority in 2018.

Legislation (SB 572) was introduced in the Virginia Senate in January 2018 to expand Medicaid (albeit with work requirements and premiums), but a party-line vote in the Education and Health Committee killed it before the end of January. The following week, a House committee voted 14-3 in favor of HB 338, which would have imposed work requirements on some existing Medicaid enrollees in Virginia. HB338 passed in the house in February, with a 64 to 36 vote, but it did not advance in the Senate.

Former Governor McAuliffe’s proposed budget was under review in the 2018 legislative session, and it called for Medicaid expansion — as had McAuliffe’s proposed budgets for the three previous years. In the House, two budget bills — HB29 and HB30 — were considered, and both included Medicaid expansion (HB29 was a short-term budget bill, covering the first half of 2018; HB30 was a two-year budget bill, starting where HB29 ended).

Both budget bills passed by a wide margin in the House, with bipartisan support. So the Virginia House of Delegates essentially voted in support of Medicaid expansion three times during the 2018 session, passing HB338, HB29, and HB30 (although HB338 was based on the premise that the state would seek permission from the federal government to impose a work requirement as a condition of Medicaid expansion). 2018 was the first time that the Virginia House had voted in favor of Medicaid expansion — due in large part to the gains that Democrats made in the 2017 election, and the fact that Virginia voters clearly support Medicaid expansion.

The Senate, however, continued to steadfastly reject Medicaid expansion, and the result was an impasse on the budget. The regular legislative session ended in March with no budget agreement, and considerable tensions between the House and Senate on the issue of Medicaid expansion. Gov. Northam called lawmakers back for a special session that began on April 11, to continue to work on the budget. Lawmakers had to have a budget in place by July 1 in order to avoid a government shutdown. Governor Northam proposed a new budget, which was under consideration during the special session via HB5001 and HB5002.

The House Appropriations Committee approved the new budget on April 13, with an enhanced work requirement, designed to get Republicans in the Senate to support the measure (at least two Senate Republicans had to vote yes on a budget with Medicaid expansion in order to pass it; ultimately, four Senate Republicans supported the measure). The budget bills the House passed earlier in 2018 had called for a work requirement, but enrollees would not have lost their Medicaid coverage for non-compliance. The new budget bill stipulates that the work requirement will be an enforced condition of continued enrollment in Medicaid (although as noted above, Medicaid expansion took effect in January 2020 and the work requirement is still pending federal approval). The revised budget also allocates funding to help people comply with the work requirement, for programs such a job training.

Medicaid expansion proponents wanted Virginia to expand Medicaid as called for in the ACA. But conservative lawmakers insisted on work requirements before they’ll consider expansion. And the Trump Administration had already started approving work requirements for other states, which was a non-starter under the Obama Administration.

Work requirements are popular among GOP lawmakers, but the vast majority of Medicaid recipients are either disabled or too sick to work, or else they’re already working, caring for children or elderly relatives, in school, or looking for work. There’s a pervasive myth that Medicaid recipients are able-bodied and not working, but that’s simply not the case.

Medicaid expansion proponents considered Virginia’s new budget to be a win for the state, despite the inclusion of the work reqirement. Medicaid expansion with no strings attached might have been a better option, but it was politically nonfeasible, and perfect is the enemy of good. Despite the work requirement, hundreds of thousands of Virginia residents gained access to quality health coverage in 2019.



Governor McAuliffe previously tried to expand Medicaid, but lawmakers foiled his efforts

Governor McAuliffe took office in January 2014, and had long said that Medicaid expansion was one of his top priorities. It was a contentious issue between the Governor and the state legislature, with a government shut-down that loomed in the summer of 2014 because of budget disagreements pertaining to Medicaid expansion.

The “Virginia Way” was advanced in the legislature in early 2014 as a modified approach to Medicaid expansion, but it didn’t go anywhere, as the Republican majority in the legislature continued to insist on Medicaid reform before there’s any possibility of expanding coverage to more people.

Eventually, Governor McAuliffe pulled back from his push for full expansion, settling instead for an approach that would have worked with what the state already had and made some minor expansions that could eventually bring health insurance to 200,000 of the state’s most vulnerable residents. Governor McAuliffe outlined his ten-step plan in September 2014.

Shortly after that, in mid-September, the legislature convened for a special session on the budget, which included a proposed bill to expand Medicaid. It was heavily debated during the special session, but was rejected in a 64-33 vote in the House and did not make it to the Senate.

The state Medicaid Director, the Governor, and Democrats in the Legislature (along with one Republican, Thomas Davis Rust of Fairfax) continued to push for some form of Medicaid expansion, and 61 percent of Virginia’s residents supported Medicaid expansion as of late 2014, while only 31 percent opposed it.

In early 2015, Gov. McAuliffe included Medicaid expansion in his budget proposal, but both the House and Senate budget committees rejected that aspect of the budget immediately (although they did include some funding for community clinics and treatment for severely mentally-ill patients). Unlike 2014, when a budget stalemate nearly triggered a government shutdown, the Governor signed the new budget in March 2015, well in advance of the start of the new fiscal year.

The issue of Medicaid expansion was revisited during the 2016 legislative session, but lawmakers once again rejected funding for Medicaid expansion in the budget bill during the 2016 session. McAuliffe vetoed a measure in 2016 that would have exempted direct primary care arrangements from the regulatory oversight that applies to health insurance products, and in issuing his veto, the governor noted that Medicaid expansion would be a much more effective means of ensuring that people have access to affordable, comprehensive health coverage.

[The following year, during the 2017 legislative session, Virginia lawmakers passed H.B.2053 (and the companion senate bill, S.B.800), which exempts direct primary care arrangements from insurance oversight; Governor McAuliffe signed the legislation into law in April 2017.]

In September 2016, Governor McAuliffe reiterated his point that Medicaid expansion would help to close the budget gap that Virginia was facing. When McAuliffe left office in January 2017, Medicaid had still not been expanded in Virginia. But his successor, Governor Ralph Northam, campaigned on the promise of expansion, and Democrats gained considerable ground in the state legislature in the 2017 election, in large part due to the Medicaid expansion issue.

Who is eligible for Virginia Medicaid?

In addition to low-income elderly residents and those who are disabled, Medicaid is available to the following populations in Virginia:

Pregnant women with household incomes up to 143 percent of poverty.

Virginia also offers FAMIS – Family Access to Medical Insurance Security – which provides health coverage for uninsured pregnant women who are not eligible for Medicaid but have household incomes up to 200 percent of poverty.

Adults under age 65 are eligible if their income doesn’t exceed 138 percent of the poverty level.

Children are eligible for Medicaid if their household incomes are up to 143 percent of poverty. Above that level, they are eligible for CHIP (Cover Virginia’s FAMIS program) if their household incomes do not exceed 200 percent of poverty.

How do I apply?

You can apply at HealthCare.gov at any time – Medicaid enrollment is available year-round.

You can also apply online at Cover Virginia (the website will redirect you here to apply) anytime during the year.

You can also apply over the phone with HealthCare.gov by calling 1-800-318-2596.

You can apply in-person at any of Virginia’s Department of Social Services offices.

You can print a paper application and mail or deliver it to a Department of Social Services office.

Medicaid enrollment in Virginia: 2013-2020

By mid-April 2014, 48,660 Virginia residents had enrolled in Medicaid or CHIP through HealthCare.gov. They were eligible based on the pre-2014 enrollment guidelines, but may not have known that Medicaid was available to them. Medicaid enrollment is year-round, so there is no specific time during the year when people need to enroll.

When CMS released total Medicaid enrollment numbers for August 2014, Virginia’s total was 5.2 percent lower than it was prior to October 2013. But that’s the result of a change in how the state reports the data; starting in August, Virginia stopped including people with limited Medicaid benefits among the total enrollees.

By June 2016, total enrollment in Virginia’s Medicaid program was 968,666, which was 4 percent higher than it had been in late 2013. Enrollment growth hovered in the single digits until Medicaid was expanded, and then it grew substantially. By April 2020, enrollment had grown to 1,450,785, a 55 percent increase since late 2013.

Virginia Medicaid history

Medicaid became effective in Virginia in July 1969, making it one of the last states in the country to implement the program (the first states to provide Medicaid did so in January 1966).

In late 1991, CMS approved Virginia’s Medicaid waiver application to begin a Medicaid primary care case management program dubbed MEDALLION. The case management system was a response to escalating costs, increasing use of emergency rooms in lieu of primary care, and physician reluctance to treat Medicaid patients. The managed care model began as a pilot program in five counties, but was considered a success and expanded statewide in 1995. Virginia was also one of the first states to expand the managed care program to include elderly, blind, and disabled Medicaid recipients (these populations had typically always been covered by traditional Medicaid in each state, rather than managed care).

By 1995, in select areas of the state, Virginia Medicaid recipients were able to choose from among a variety of Managed Care Organizations (MCOs) under the Options Program. This was the first time MCOs were used in the Medicaid program in Virginia.

The Medallion II MCO took effect in 1996, and it was gradually expanded across the state. By 2001, there were seven MCO partners in the Medallion II program. In the ensuing years, there have been numerous consolidations, entries, and exits on the part of MCOs. Overall, the state has concluded that MCOs are the most cost-effective way to provide Medicaid benefits to eligible residents.

Virginia created FAMIS (Family Access to Medical Insurance Security) in 2000, following the creation of CHIP (Children’s Health Insurance Program) by the federal government in 1997. FAMIS-eligible families can choose to enroll in available employer-sponsored insurance and receive help with the premiums if that is deemed more cost effective than directly providing coverage through the FAMIS program.

The state also took advantage of the fact that the ACA allows Medicaid to cover inpatient care for prison inmates, instead of having the Department of Corrections foot the bill. Virginia started doing this in 2014, and it’s estimated to have saved the state about $1 million in just the first year, because Medicaid expenses are split with the federal government, while DOC expenses are covered by the state.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.