RICHMOND — The two houses of the General Assembly passed competing budget plans Thursday that set the stage for a political battle over whether to accept federal Medicaid dollars to expand health coverage for low-income Virginians.

The politically divided state Senate approved a provision that would use federal Medicaid expansion dollars to help an estimated 250,000 Virginians purchase private health insurance. Three Republicans joined the chamber’s 20 Democrats in voting to incorporate the provision in the two-year state budget.

At the other end of the state Capitol, the Republican-dominated House of Delegates voted down an identical Medicaid provision on a largely party-line vote before passing its version of the budget. House GOP leaders allowed a floor vote on an amendment that mirrored the Senate’s Medicaid proposal so that the House would be on record against it before the two chambers begin budget negotiations.

House Republicans also sent warning that the Senate and Gov. Terry McAuliffe could jeopardize passage of a budget by insisting on Medicaid expansion as part of a new state spending plan. The General Assembly is scheduled to adjourn on March 8.

“If 67 votes doesn’t send a decisive message, I don’t know what does,” said House Majority Leader Kirk Cox, referring to the number of House votes against the plan.

The budget bills passed Thursday reflect changes to the $95.9 billion spending plan that former Gov. Bob McDonnell introduced in December.

In a written statement, McAuliffe called the Senate’s proposal “a smart, market-based path forward to covering more Virginians and growing our economy in the process.” The Democratic governor said House Republicans “chose ideology ahead of what’s best for the Commonwealth on this preliminary vote,” but added that he was “optimistic” the two sides can compromise.

Under the Affordable Care Act, states can expand Medicaid eligibility to people with incomes up to 138 percent of the federal poverty level. The federal government will cover the full cost of expansion through 2016, and states eventually would have to assume 10 percent of the cost.

The Senate’s plan would create a private option model that would use Medicaid expansion funds to help low-income Virginians purchase private insurance. The so-called “Marketplace Virginia” plan would include provisions for cost-sharing by participants and work requirements. Virginia would have to get a waiver from the federal government to implement the program.

Supporters of the Senate plan contend that it will allow the state to recapture an estimated $1.7 billion a year in taxes that Virginians pay to support the Affordable Care Act.

The House budget contains $81 million for inflation adjustments in Medicaid payments to hospitals, and $6 million in new funding for free clinics and community health centers. But hospitals have been counting on Medicaid expansion dollars to help offset Medicare cuts and a growing demand to provide charity care.

“If we do nothing, then the 250-plus thousand individuals that we’ve left out will have only one alternative for health care, and that will be to walk into the most expensive system that is operated here in Virginia,” said Sen. John Watkins, R-Powhatan, who crafted the Senate proposal. “And guess what? They are going to expect us to reimburse those systems to keep them running.”

Sen. Bill Stanley, R-Franklin County, who represents some of the state’s most economically distressed communities, questioned whether the federal government would keep its commitment to fund expanded health coverage. Stanley voted against the Senate plan.

“They also made the promise that you can keep your health care plan,” Stanley said during the Senate’s floor debate. “Many can’t. Millions can’t.”

“I’d like everyone to be covered,” Stanley said. “I would like us all to find the solution. I think we’re rushing into the fire without taking a good assessment of what needs to be done …. It may not be this year, but in 2016, if we do this, we’re going to be looking at a hole in our budget that we can only fill by taxing the citizens of the commonwealth of Virginia.”

Sen. Donald McEachin, D-Henrico County, noted that Virginia’s part-time legislators are eligible for health insurance “that rivals those in the private marketplace.”

“If the health insurance we’re able to provide ourselves as part-time workers is a good thing, then sure we can provide health insurance for those who have no health insurance, who go to work every day,” McEachin said.

During the House floor debate, Republicans questioned whether the federal government would grant the waivers Virginia would need to implement the private option plan.

“We need to agree on what we want to ask for and then ask for that waiver,” said freshman Del. Sam Rasoul, D-Roanoke, who argued in favor of the plan. If “the argument is they haven’t approved it, that doesn’t make any logical sense. We haven’t asked yet.”

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