June 25, 2014

The Power to Expand Medicaid Under

Virginia Law
Paul D. Clement
Erin E. Murphy
Bancroft PLLC
1919 M Street NW
Suite 470
Washington, DC 20036

Bancroft PLLC The Power to Expand Medicaid Under Virginia Law i
Authors
Paul D. Clement is a partner at Bancroft PLLC. Mr. Clement served as the 43rd Solicitor
General of the United States from June 2005 until June 2008. Prior to his confirmation as
Solicitor General, he served as Acting Solicitor General for nearly a year and as Principal
Deputy Solicitor General for over three years. He has argued more than 70 cases before the
United States Supreme Court, including NFIB v. Sebelius, McConnell v. FEC, Tennessee v.
Lane, Rumsfeld v. Padilla, Credit Suisse v. Billing, United States v. Booker, MGM v. Grokster,
and McDonald v. Chicago.
Erin E. Murphy is a partner at Bancroft PLLC. Ms. Murphy has briefed a number of
significant matters in the U.S. Supreme Court and the federal courts of appeals, including the
landmark constitutional challenges brought by 26 States to the Patient Protection and
Affordable Care Act. This year, Ms. Murphy successfully argued McCutcheon v. FEC before
the Supreme Court. Before joining Bancroft, she served as a law clerk to Chief Justice John
G. Roberts, Jr., in the Supreme Court of the United States and Judge Diane S. Sykes of the U.S.
Court of Appeals for the Seventh Circuit, and as a Bristow Fellow in the Office of the Solicitor
General.
Bancroft PLLC The Power to Expand Medicaid Under Virginia Law ii
Table of Contents
EXECUTIVE SUMMARY ............................................................................ ES-1
BACKGROUND .................................................................................................. 1
A. The Federal Medicaid Program ............................................................. 1
B. The Virginia Medicaid Program ............................................................ 2
ANALYSIS ........................................................................................................... 4
A. The General Assembly Exercises Ultimate Control over Virginias
Medicaid Program Through Its Exclusive Constitutional Power to
Appropriate Funds ................................................................................. 4
B. Virginia Statutory Law Reinforces the Conclusion that the General
Assembly Retains Ultimate Control over Virginias Medicaid
Program ................................................................................................. 6
CONCLUSION ..................................................................................................... 9

Bancroft PLLC The Power to Expand Medicaid Under Virginia Law ES-1
Executive Summary
This white paper addresses whether the Governor of Virginia has the power to expand
Virginias Medicaid program to the levels contemplated by the Affordable Care Act
unilaterally, with no action by the General Assembly. The Governor does not. Virginias
Medicaid program is a creature of state statute and is operated pursuant to appropriations of
state funds. Because the Virginia Constitution grants the General Assembly alone the power
to appropriate funds, the General Assembly necessarily retains ultimate control over the terms
of Virginias Medicaid program. That is true regardless of whether the source of financing is
state or federal funds. Either way, the funds used to operate Medicaid come from the state
treasury, and under the Virginia Constitution money shall not be paid out of the state treasury
without an appropriation by the General Assembly. In keeping with that understanding, the
General Assembly routinely appropriates all federal funds that Virginia receiveswhether for
Medicaid or for other federally financed state programsin its budget. That consistent practice
reflects the General Assemblys manifest intent not to cede to the Governor its exclusive power
of the purse when it agrees to participate in a federal spending program.
Virginia statutory law reinforces the conclusion that the General Assembly retains
ultimate control over whether to expand the Commonwealths Medicaid program. The General
Assembly has identified by statute the categorically and medically needy individuals who must
be covered by Virginias Medicaid program. That state statute does not grant the executive
any general, overarching authority to extend coverage to individuals who fall outside the
specific categories identified. Instead, the executive is authorized to alter the program
unilaterally only in one narrow circumstancewhen necessary to prevent the loss of all federal
Medicaid funding. Virginia thus is unlike the two states that have expanded their Medicaid
programs without legislative action, both of which have granted their executives broad
authority to alter their Medicaid programs unilaterally, not just to maintain compliance with
federal requirements, but also to receive any and all additional federal funds Congress may
offer. Here, by contrast, the General Assembly has given the executive neither the power to
take such unilateral action nor the funds to execute it. Instead, it has given the executive the
power only to take such actions as are necessary to prevent a total loss of federal Medicaid
funding. Because the United States Supreme Court has declared unconstitutional Congress
attempt to force states to expand their Medicaid programs, and as a consequence has concluded
that the federal government may not withhold Medicaid funding from states that decline to
expand, that narrow circumstance alone does not exist here.
In short, whether to extend Medicaid coverage to individuals who do not fit the current
statutory requirements established by Virginia law is a quintessential legislative decision.
Nothing in Virginia statutory or constitutional law empowers the Governor to make that
decision unilaterally, let alone to execute that decision without the requisite appropriation of
funds from the General Assembly.

Bancroft PLLC The Power to Expand Medicaid Under Virginia Law 1
Background
A. The Federal Medicaid Program
Medicaid is a cooperative federal-state program through which the federal government
reimburses states for a share of their costs if they agree to fund medical assistance to certain
qualifying low-income individuals. See Social Security Amendments of 1965, Title XIX,
codified at 42 U.S.C. 1396 et seq. At its inception, Medicaid offered federal funding to states
that agreed to cover individuals deemed categorically needy by virtue of their eligibility for
four existing social programsAid to Families with Dependent Children, Old Age Assistance,
Aid to the Blind, and Aid to the Permanently and Totally Disabled. See 42 U.S.C.
1396a(a)(10) (1970). Over time, Congress amended the federal Medicaid statute to require
states who wish to remain eligible to receive federal funding to cover pregnant women and
children age 5 and under with family incomes below 133% of the federal poverty level, as well
as children between the ages of 6 and 18 with family incomes below the federal poverty level.
Although Congress offered states the option of covering additional individuals, it did not
require participating states to cover low-income individuals who do not fit into one of these
groups of categorically needy. Accordingly, federal law generally did not require states to
cover childless adults who are not disabled.
Through the Patient Protection and Affordable Care Act (ACA), Pub. L. No. 111-
148, 124 Stat. 119 (2010), Congress attempted to dramatically expand the conditions a state
must satisfy in order to continue receiving federal Medicaid funding. Rather than impose
coverage requirements with respect to only certain categories of low-income individuals, the
ACA mandated that states expand their programs to provide coverage to all individuals under
age 65 with incomes up to 133% of the poverty level, with a 5% income disregard provision
that effectively raised the level to 138%. Id. 1396a(a)(10)(A)(i)(VIII), (e)(14)(I). The ACA
also established a new level of minimum essential coverage that states must provide to all
Medicaid recipients. Id. 1396a(k)(1), 1396u-7(b)(5), 18022(b). Although the federal
government initially would fund 100% of the costs generated by complying with these new
provisions, by 2017, states would be responsible for 5% of those costs, with that responsibility
increasing to 10% by the end of the decade. Id. 1396d(y). Because the ACA structured these
new provisions as requirements for continued participation in Medicaid, it was meant to leave
states with no choice but to expand their Medicaid programs or forfeit all federal Medicaid
fundsfor Virginia, an annual amount in the billions.
Shortly after the ACAs enactment, 26 states challenged Congress effort to
dramatically expand states Medicaid obligations, and the U.S. Supreme Court agreed that the
new conditions the Act placed upon continued receipt of Medicaid funds were an
unconstitutionally coercive exercise of Congress spending power. See Natl Fedn of Indep.
Bus. v. Sebelius, 132 S. Ct. 2566, 2601-07 (2012) (opinion of Roberts, C.J., joined in relevant
part by Breyer and Kagan, JJ.); id. at 2657-68 (dissenting opinion of Scalia, Kennedy, Thomas,
and Alito, JJ.). A majority of the Court concluded that the appropriate remedy for this
constitutional violation was to hold that the federal government may not withhold funding for
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existing Medicaid programs from states that decline to expand their programs to the levels
contemplated by the ACA. Id. at 2608 (opinion of Roberts, C.J., joined in relevant part by
Breyer and Kagan, JJ.); see also id. at 2642 (opinion of Ginsburg, J., joined by Sotomayor, J.).
As a practical matter, that means States may now choose to reject the expansion without
endangering funding for their existing Medicaid programs. Id. at 2608 (opinion of Roberts,
C.J., joined in relevant part by Breyer and Kagan, JJ.).
B. The Virginia Medicaid Program
Virginia has participated in Medicaid since 1969 and currently receives 50% of its
funding for its Medicaid program from the federal government. See 79 Fed. Reg. 3,385, 3,387
(Jan. 21, 2014). Consistent with pre-ACA federal law, Virginias program covers five
categories of low-income individuals: children, pregnant women, the elderly, individuals with
disabilities, and parents with dependent children. Coverage for these categories, as well as
certain categories of medically needy individuals, is authorized by Virginia statutory law,
which establishes the basic terms with which Virginias Medicaid plan must comply. See Va.
Code Ann. 32.1-325. Income cut-offs for each category are established through a
combination of statutory and regulatory law. See id.; 12 Va. Admin. Code 30-40-10 et seq.
Again consistent with pre-ACA federal law, Virginia law does not authorize Medicaid
coverage for childless adults who do not qualify as categorically or medically needy.
Although the Department of Medical Assistance Services is tasked with administering
Virginias program, both the Governor and the General Assembly exercise ongoing power over
the manner in which the program operates. The program is administered pursuant to a plan
prepared by an 11-member Board of Medical Assistance Services; that plan must be approved
by the Governor and must comply with the statutory requirements set forth in Section 32.1-325
and elsewhere. See Va. Code Ann. 32.1-325(A). The sole exception to those statutory
conditions is found in Section 32.1-325(C), which allows the Board, with the Governors
approval, to amend Virginias plan temporarily without legislative approval [i]n order to
enable the Commonwealth to continue to receive federal grants or reimbursement. Id. 32.1-
325(C). In other words, if any aspect of Virginias existing plan were to render it ineligible for
continued receipt of all federal Medicaid funds, the Board could amend the plan to remedy that
problem, regardless of any other provision of this chapter, and without complying with
Virginias administrative procedures law. Id. But even in those narrow circumstances, there
is no administrative power to effect permanent changes that are inconsistent with existing law.
Any such amendments that are in conflict with the Code of Virginia shall only remain in effect
until July 1 following adjournment of the next regular session of the General Assembly unless
enacted into law. Id. Thus, the General Assembly retains ultimate authority over whether to
make such amendments to Virginias plan permanent.
In addition to setting forth the basic contours of Virginias Medicaid program by statute,
the General Assembly exercises significant control over the program through its appropriations
power. Each year, the Department of Medical Assistance Services must aid the Department of
Planning and Budget in preparing an estimate of Medicaid expenditures for the current year,
as well as a forecast of expenditures for the next two years. Id. 32.1-323.1. That estimate is
Bancroft PLLC The Power to Expand Medicaid Under Virginia Law 3
provided to multiple House and Senate committees, including the House Committee on
Appropriations, for use in preparing the next budget. Through its budget, the General
Assembly then appropriates funds to operate Medicaid. This appropriation is not merely for a
sum sufficient to run Medicaid; rather, it establishes concrete amounts of both state revenues
and federal funds to be used to finance the program. See, e.g., H.B. 1500, Item 307 (Va. 2013)
(appropriating $7,610,298,210 in general, dedicated special revenue, and federal trust funds for
Virginias FY2013 Medicaid program); H.B. 1500, Item 297 (Va. 2011); H.B. 1600, Item 306
(Va. 2009). The General Assembly also uses its budget, among other things, to identify specific
purposes for which those funds are to be applied, to supply the Department with authority it
otherwise lacks to amend the program in various respects, and to impose additional conditions
and obligations on the Departments authority. See, e.g., H.B. 1500, Item 307 AC, NNN
(Va. 2013) (directing portions of funds be used for specific purposes), TTT (authorizing
Department to amend plan to expand coverage of pregnant women), P.1 (directing Department
to develop and pursue cost saving strategies); H.B. 1500, Item 297 C, E (Va. 2011)
(directing portion of funds be used for specific purposes), M (directing Department to develop
and pursue cost saving strategies).
The General Assemblys budget legislation has also restricted the circumstances under
which the Commonwealths Medicaid program could be expanded to the levels contemplated
by the ACA. In conjunction with its 2013 amendments to the 2012-14 budget, the General
Assembly enacted legislation creating a body known as the Medicaid Innovation and Reform
Commission, or MIRC. Va. Code Ann. 30-339. By statute, MIRC is tasked with voting
on whether to endorse any proposal to expand Virginias Medicaid program to cover
individuals made newly eligible by the ACA. Id. 30-339.D.2. Section RRRR.6.a of Item
307 of the 2013 budget amendments provided that the Department shall seek approval from
the federal government to implement any such expansion only if MIRC endorses a proposal to
do so. See H.B. 1500, Item 307 RRRR.6.a (Va. 2013). Section RRRR also appropriated
sum sufficient to implement any expansion that is approved by MIRC and implemented
by the Department. Id. RRRR.9. In contrast to the 2013 budget amendments, however, the
2014 budget does not appropriate a sum sufficient to fund any expansion that might be
approved. H.B. 5002, Item 301, TTT.9 (Va. 2014). Instead, it explicitly requires a separate
appropriation before any expansion can take effect:
[N]otwithstanding any other provision of this act, or any other law, no general
or nongeneral funds shall be appropriated or expended for such costs as may be
incurred to implement coverage for newly eligible individuals pursuant to 42
U.S.C. 1396d(y)(1) [2010] of the Patient Protection and Affordable Care Act,
unless included in an appropriation bill adopted by the General Assembly on or
after July 1, 2014.
Id. TTT.9.
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Analysis
The power to expand Virginias Medicaid program to the levels contemplated by the
ACA rests in the hands of the General Assembly. That conclusion flows both from the General
Assemblys exclusive power under the Virginia Constitution to appropriate funds, as well as
from the statutory provisions it has enacted establishing the contours of Virginias Medicaid
program. Because that program cannot operate without an appropriation of state funds to
finance it, the General Assembly retains control over the scope of the program through its
power to decide whether and how to appropriate funding for the program. The General
Assembly also exercises control over the program through Virginia statutes that authorize
Medicaid, which establish the specific categories of individuals that the program shall cover.
Those statutes do not delegate to the Governor the power to dramatically expand the program
unilaterally, let alone to do so without obtaining the requisite appropriation of funds.
A. The General Assembly Exercises Ultimate Control over
Virginias Medicaid Program Through Its Exclusive
Constitutional Power to Appropriate Funds.
As a matter of Virginia constitutional law, whether to expend funds to finance
Virginias Medicaid program is the exclusive province of the General Assembly. The Virginia
Constitution provides that [n]o money shall be paid out of the State treasury except in
pursuance of appropriations made by law; and no such appropriation shall be made which is
payable more than two years and six months after the end of the session of the General
Assembly at which the law is enacted authorizing the same. Va. Const. art. X, 7. The
Constitution further provides that any bill appropriating money must be approved by a majority
of all members elected to each house of the General Assembly. See Va. Const. art. IV, 11.
Virginia statutory law likewise confirms that [n]o money shall be paid out of the state treasury
except in accordance with appropriations made by law. Va. Code Ann. 2.2-1819.
Accordingly, the power to appropriate funding for Virginias Medicaid program rests with the
General Assemblyand the General Assembly alone.
The exclusive nature of this grant of power to the General Assembly serves important
constitutional purposes. Most obviously, it ensures that the officials most accountable to the
people will consider and approve any expenditure of the peoples money. Moreover, the
bicameralism and presentment process required of all lawmaking, and the absolute majority
vote required for appropriations in particular, ensure that the peoples money will be spent only
after multiple layers of review and approval by multiple decision-makers. Not only do these
procedural protections promote sound public policy and fiscal responsibility, but they also
provide an essential check on executive power by ensuring that public funds will be spent
according to the letter of the difficult judgments reached by the legislature as to the common
good and not according to the individual favor of Government agents. Office of Pers. Mgmt.
v. Richmond, 496 U.S. 414, 42728 (1990); see also 2 Joseph Story, Commentaries on the
Constitution of the United States 1348 (3d ed. 1858) (If it were otherwise, the executive
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would possess unbounded power over the public purse and might apply all its moneyed
resources at his pleasure.).
The appropriations power is an exclusively legislative power regardless of whether the
funds being appropriated come from revenue raised by Virginia or from funds supplied by the
federal government. In either instance, the money shall be paid out of the State treasury only
pursuant to an appropriation by the General Assembly. Va. Const. art. X, 7; Va. Code Ann.
2.2-1819. Thus, when presented with a similar question, Attorney General Cuccinelli
concluded that an appropriations act is required for the expenditure of revenues of the
Commonwealth, including grant funds from the United States government. Op. Va. Atty
Gen., No. 10-082 at 1 (Oct. 1, 2010). Consistent with that understanding, the General
Assembly routinely appropriates both revenues raised by the Commonwealth itself and federal
funds received to finance (whether in part or in whole) state services. See, e.g., H.B. 1500,
Item 306 (Va. 2013) (appropriating federal CHIP funds); Item 307 (appropriating federal
Medicaid funds); Item 390 (appropriating federal Omnibus Crime Control Act funds); Item
397 (appropriating federal emergency management funds); Item 417 (appropriating federal law
enforcement and highway safety funds); Item 438 (appropriating federal transportation safety
funds); see also H.B. 1500 (Va. 2011) (appropriating federal funds for myriad items).
Accordingly, not only does the Virginia Constitution preclude the General Assembly from
ceding its exclusive appropriations power to the Governor by simply agreeing to accept federal
funds, but the General Assemblys deliberate legislative actions have made manifestly clear
that it has no intention of doing so. Cf. Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579,
637 (1952) (Jackson, J., concurring) (executive power is at its lowest ebb when the executive
takes measures incompatible with the expressed or implied will of the legislature).
The General Assemblys appropriations power over Medicaid is not limited to a simple
up or down vote on whether to fund the program. To the contrary, because the appropriations
power includes the power to decide how much money to appropriate, it necessarily provides
the General Assembly with the power to impose conditions on the scope of the program as
well. And the General Assembly routinely exercises that power through its annual budget,
which appropriates a fixed sum to operate Virginias Medicaid program and details myriad
conditions with which the program must comply, as well as conditions on how appropriated
funds may be spent. See, e.g., H.B. 1500, Item 307, AC, NNN, TTT, P.1 (Va. 2013); H.B.
1500, Item 297 C, M, GG.1 (Va. 2011); H.B. 1600, Item 306, CF, N, FF, JJ (Va. 2009).
Thus, should the Governor or the Department attempt to expand Virginias Medicaid program
in a manner with which the General Assembly disagrees, the General Assembly could prevent
that expansion from taking effect by simply refusing to appropriate any funds for those
additional individuals or services, and/or including in its budget a specific condition that no
funds appropriated shall be used for such purposes.
Indeed, the General Assembly has already taken such steps in its 2013 budget
amendments and in its most recent budget. In the 2013 budget amendments, although the
General Assembly appropriated a sum sufficient to implement coverage for newly eligible
individuals under the ACA, it explicitly conditioned implementation of any such expansion
on approval by [MIRC]. H.B. 1500, Item 307 RRRR.6.b, 9 (Va. 2013). By appropriating
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funds to implement an expansion that could occur ifand only ifMIRC endorsed it, the
General Assembly effectively prohibited the executive from expanding Medicaid unilaterally.
The 2014 budget achieves that result even more explicitly, as it expressly provides that no
general or nongeneral funds shall be appropriated or expended to fund a Medicaid expansion
unless included in an appropriation bill adopted by the General Assembly on or after July 1,
2014. H.B. 5002, Item 301, TTT.9 (Va. 2014). Accordingly, under the now-operative
budget, a Medicaid expansion cannot take effect without additional legislation appropriating
funds to finance it. As these actions underscore, not only does the General Assembly have the
ability to control the scope of Virginias Medicaid program through its power of the purse, but
the General Assembly has exercised that power to make crystal clear that no funds may be
expended to finance any attempt by the Governor to expand Medicaid unilaterally.
To be sure, the General Assembly must exercise its spending check on Virginias
Medicaid program mindful of the potential federal law consequences of its actions. For
instance, the federal Medicaid statute requires states to cover pregnant women and children
below certain income levels. See 42 U.S.C. 1396a(l). Accordingly, should the General
Assembly refuse to appropriate funds to cover such individuals, that choice could result in loss
of eligibility to receive federal funding. See id. 1396c. Likewise, should Virginia decline to
use federal funds to finance the Medicaid services for which those funds were provided, the
federal government presumably could demand return of any unused funds. But those potential
federal law consequences do not alter the basic structure of Virginia law, which gives the
General Assembly alone ultimate control over whether and how to fund Virginias Medicaid
program. Nor are those potential federal consequences even implicated when it comes to
deciding whether to expand Virginias Medicaid program to the levels contemplated by the
ACA. As the Supreme Court made emphatically clear in NFIB, the federal government may
not withhold funding for existing Medicaid programs if a state declines to dramatically expand
its program to render itself eligible for receipt of the new federal funds the ACA offers. See
NFIB, 132 S. Ct. at 2608 (opinion of Roberts, C.J.). In short, after NFIB, expansion is no longer
a condition of eligibility for continued receipt of Medicaid funding; rather, it is a discretionary
determination for each state to make in accordance with its own constitutional process. In
Virginia, that constitutional process demands legislative action.
B. Virginia Statutory Law Reinforces the Conclusion that the
General Assembly Retains Ultimate Control over Virginias
Medicaid Program.
The General Assembly also exercises control over Virginias Medicaid program
through the statutes that authorize it. Indeed, setting the contours of state policy is among the
core legislative activities vested in the General Assembly. See, e.g., Op. Va. Atty Gen., No.
05-094 at 1 (Feb. 24, 2006) (changing the public policy of the Commonwealth is within the
purview of the General Assembly). The governing statutory provision sets forth with great
specificity the categories of individuals and services to be covered by the Commonwealths
program. See Va. Code Ann. 32.1-325(A)(1)(25). Nowhere in that long list is there any
catch-all provision granting the executive the authority to extend coverage to low-income
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individuals who do not fall within one of those specified groups of categorically or medically
needy. Thus, while the Department may have some discretion to set eligibility criteria within
the contours established by statutesubject, of course, to the Governors approval power and
the General Assemblys appropriations powerexisting Virginia law does not permit the
extension of Medicaid coverage to individuals who fall into the eligible categories that the
General Assembly has established. In other words, there is simply no statutory authority for
the Department to expand Medicaid coverage in the manner contemplated by the ACA in the
first place. And even if there were, that power would be subject to the same executive and
legislative checks as all other powers of the Department, meaning no expansion could occur
without approval by the Governor and an appropriation from the General Assembly to fund it.
Once again, the General Assemblys recent budget legislation underscores that
conclusion. In its 2013 budget amendments, the General Assembly explicitly granted the
Department the power to expand Medicaid, but ifand only ifMIRC endorsed a proposed
plan to do so. See H.B. 1500, Item 307 RRRR.6 (Va. 2013). This reflects the General
Assemblys clear understanding and intent that Medicaid may be expanded only on whatever
terms the General Assembly may choose to impose. Indeed, the 2014 budget makes this
conclusion even more emphatically. By prohibiting the expenditure of funds to finance an
expansion absent legislative approval, see id. TTT.9, the General Assembly confirmed that
the Governor must obtain both authority and funding from the General Assembly before any
expansion can take effect.
Section 32.1-325(C) of the Virginia Code likewise underscores the conclusion that the
Governor has no authority to expand Medicaid without legislative approval. Section 32.1-
325(C) provides the Board of Medical Assistance Services with a safety valve in the event
Congress should impose new conditions on the continued receipt of existing federal funding
that take effect before the General Assembly has an opportunity to consider them. In that
narrow circumstance, the General Assembly has given the Board the power, subject to approval
by the Governor, to amend Virginias plan as needed [i]n order to enable the Commonwealth
to continue to receive federal grants or reimbursements. Va. Code Ann. 32.1-325(C). That
power may be exercised, however, only as necessary to meet the requirements of federal law
or regulations or because of the order of any state or federal court, id.; it may not be used to
amend Virginias program unilaterally to comply with optional conditions necessary only to
the receipt of additional, new federal funds. Cf. Adoptive Couple v. Baby Girl, 133 S. Ct. 2552,
2560 (2013) (statutes use of term continued plainly refers to a pre-existing state).
Moreover, even in the narrow circumstances in which it may invoked, this safety valve is a
temporary power that typically expires with the next legislative session, at which the General
Assembly may determine whether to make such amendments permanent. Va. Code Ann.
32.1-325(C). Once again, that is a power that the General Assembly routinely exercises
for instance, the 2013 budget amendments included numerous provisions specifically
authorizing the Department to amend Virginias program in ways required by federal law, as
well as in other ways that the General Assembly deemed appropriate. See, e.g., H.B. 1500,
Item 307, RR, EEE, TTT (Va. 2013).
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That readily distinguishes Virginias Medicaid program from the program in Kentucky,
one of the two states to have expanded Medicaid without additional legislation. By statute,
Kentucky has adopted as the policy of the Commonwealth to take advantage of all federal
funds that may be available for medical assistance. Ky. Rev. Stat. 205.520(3). In keeping
with that policy, the Kentucky legislature has specifically empowered Kentuckys Secretary
for Health and Family Services not only to comply with any requirement that may be
imposed as a condition on continued receipt of existing federal funds, but also to take
advantage of any opportunity that may be presented by federal law for receipt of additional
funds. Id. In other words, unlike Virginias General Assembly, Kentuckys legislature has
explicitly granted the executive branch the power to take advantage of any and all avenues for
federal funding, even if those avenues necessitate dramatic changes to Kentuckys existing
Medicaid program. The Virginia legislature, by contrast, has delegated only a carefully
circumscribed power to make changes necessary to maintain eligibility for the continued
receipt of existing federal fundsand under the Supreme Courts decision in NFIB, Virginia
is not required to expand Medicaid to continue receiving existing federal funding.
Ohio, the other state to expand Medicaid without additional legislation, also differs
from Virginia in significant respects. Unlike Virginias Medicaid law, Ohios law specifically
declares that its Medicaid program may cover any of the optional eligibility groups for which
federal funding is available, so long as state statutes either expressly permit the medicaid
program to cover the optional eligibility group or do not address whether the medicaid
program may cover the optional eligibility group. Ohio Rev. Code 5163.03(C). Because
no Ohio statute speaks to the individuals made newly eligible for Medicaid under the ACA, the
Governor concluded that additional legislative action was not needed to extend coverage to
such individuals. See, e.g., State ex. rel. Cleveland Right to Life v. Ohio Controlling Bd., 138
Ohio St. 57, 61 (Ohio 2013). Virginia law has no analog; no Virginia statute provides the
executive with the power to extend Medicaid unilaterally to entirely new categories of
individuals. Ohios appropriations scheme also differs substantially from Virginias. Although
the Ohio legislature possesses the power to appropriate funds, it has granted an entity known
as the Controlling Board the power to authorize state agencies to expend federal funds, and has
provided that any such authorization from the board constitutes authority for the agency to
participate in the federal program providing the funds. Ohio Rev. Code 131.35(A)(5). In
effect, the Ohio legislature expressly has delegated to the Controlling Board the authority to
determine whether to participate in federal spending programs. See Cleveland Right to Life,
138 Ohio. St. at 62. Again, Virginia has done no such thing; rather, the General Assembly
carefully guards its exclusive power to appropriate all funds, including funds received through
federal programs.
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Conclusion
In sum, as a matter of both statutory and constitutional law, the authority to determine
whether to expand Virginias Medicaid program rests with the General Assembly, not the
Governor. As a statutory matter, existing Virginia law does not contemplate the kind of mass
expansion of Medicaid that the ACA envisions, meaning the executive would need additional
statutory authority to amend Virginias plan to extend coverage to all individuals with incomes
up to 138% of the federal poverty level. Even if the Governor were to attempt to accomplish
that end without legislative authority the Governor could not do so without an appropriation of
funds, which only the General Assembly may provide. In short, there is simply no
constitutional path for the Governor to expand Virginias Medicaid program without obtaining
the requisite authority and appropriation of funds from the General Assembly to do so.