RICHMOND, Va. — Gov. Terry McAuliffe is proposing a two-year pilot of an expanded Medicaid program, a suggestion he hopes will persuade Republicans to end an impasse over the state’s budget.

McAuliffe announced the plan Monday as the General Assembly returns to Richmond for the start of a special session.

Under the governor’s plan, Virginia would accept federal Medicaid funding in exchange for expanding eligibility for government-financed health care to 400,000 low-income residents. If the expansion wasn’t helping the state after two years, the governor said he would pull the plug.

McAuliffe also announced his administration had received a letter from the U.S. Department of Health and Human Services saying that Virginia would not face a financial penalty if its expanded Medicaid program lasted only two years.

The governor and House Republicans have been deadlocked on whether to expand Medicaid, which is a key part of the new federal health law. By limiting its implementation to a two-year trial period, McAuliffe is trying to offer political cover for Republicans to drop their objections to Medicaid expansion.

“If expansion doesn’t help our people, then I and I along with take the responsibility,” McAuliffe said. “Everybody else is off the hook.”

But House Republicans appeared little moved by McAuliffe’s proposal.

House Majority Leader Kirk Cox, R-Colonial Heights, said McAuliffe was hurting local governments and state universities by putting passage of a state budget at risk. Cox wants the General Assembly to pass a budget and then take up Medicaid expansion in a separate special session.

“The message is: clean budget now,” Cox said.

But McAuliffe wants the General Assembly to pass a roughly two-year, $96 billion budget that includes Medicaid expansion. The governor has said the state, and its rural health centers in particular, cannot afford to forgo $5 million a day in federal funds that would accompany an expansion.

The governor also proposed that a 2 percent raise for virtually all full-time state employees, teachers and faculty be included in the budget. His budget proposal ties funding for the raises to money saved to projected savings on indigent care costs if Medicaid was expanded.

House Republicans have argued Virginia should be wary of implementing part of a key part of President Barack Obama’s health care initiative based on its flawed rollout.

The stalemate led to the General Assembly adjourning from its regular session earlier this month without passing a budget.

(© Copyright 2014 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)


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