Virginia is at a stalemate over whether or not to expand Medicaid a dispute so acrimonious that the state government could be headed for a shutdown. The looming debate has had an impact on the state's Medicaid carriers, all of which have seen increases in enrollment in recent years.

At issue is a newly elected Democratic governor at odds with a General Assembly that has a Republican Senate majority as the result of a key senator's sudden departure in June 2014. Democratic Senator Phillip Puckett's abrupt resignation, combined with the stunning primary defeat of U.S. House Majority Leader Eric Cantor of Virginia by an emerging Tea Party candidate, has put an already tense GOP base on high alert regarding healthcare policy.

Virginia Gov. Terry McAuliffe's faint hopes of getting Medicaid expansion passed are suddenly dimmer, and caught in the middle are managed care organizations that provide Medicaid benefits and uninsured residents who are wondering what kind of coverage, if any, they might obtain. There are more than 1 million Virginia residents in the state without health insurance, according to Decision Resources Group data.

The largest carriers in Virginia have all seen sizable enrollment increases in recent years, including Anthem Blue Cross and Blue Shield of Virginia, Virginia Premier Health Plan, Amerigroup, and Aetna's Coventry Health Care of Virginia. More than 400,000 Virginians who do not have access to health insurance would benefit from Medicaid expansion, an action which is supported by organizations including the Virginia Chamber of Commerce and local chambers of Fairfax, Loudoun, Reston, and Roanoke.

Without expansion, those uninsured residents would remain stuck in a coverage gap, earning too much to qualify for Medicaid and unable to afford private insurance, and millions of dollars in potential medical and prescription drug spending would be left on the table.

Medicaid expansion was a key component of McAuliffe's campaign for governor, and he has not wavered on this position since taking office in January. The governor, in fact, vowed at a press conference in mid-June to bypass the state's General Assembly if he had to, implying that Medicaid expansion will continue to remain on the forefront even if language to enact it is not included in this budget.

The uphill battle McAuliffe faced with the General Assembly got that much steeper with Sen. Puckett's resignation and David Brat's abrupt dispatching of U.S. Rep. Cantor. Both events happened within a matter of days, blindsiding an already beleaguered Gov. McAuliffe and his Democratic colleagues.

There are several moderate Republicans who are in favor of some kind of compromise on Medicaid expansion. But conservatives are feeling emboldened by Brat's victory and are stepping up the rhetoric against expansion.

Yet all indications point to Gov. McAuliffe refusing to acquiesce. It appears he will send back a heavily redacted budget that will allow him to revisit this issue in September and force, if need be, expansion via executive order. He has already tasked his Health and Human Resources Secretary, William Hazel Jr., M.D., with examining how he can do so.

Just when it looked like the Puckett and Brat developments would force the governor to finally swerve, it appears the game of roadway chicken will continue.

Follow Chris Silva on Twitter @ChrisSilvaDRG

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