Virginia is inching closer to joining Obamacare's Medicaid expansion — but don't expect to hear health advocates cheering too loudly. 

Over the weekend, the Republican-controlled Virginia House of Delegates passed a budget that would have the state opt in to the Affordable Care Act program to cover low-income Americans. For years now, Virginia Republicans have opposed Medicaid expansion — so this new budget is a significant turnaround. 

And generally, Obamacare advocates would be thrilled with this type of movement. Expanding Medicaid in Virginia would bring coverage to an estimated 300,000 people who earn less than 138 percent of the federal poverty line (about $16,753 for an individual or $34,638 for a family of four). Virginia would be the 34th state to join the program (counting the District of Columbia).

But the Virginia Republicans' plan to expand Medicaid comes with a catch. State legislators say it would require enrollees to work in order to receive coverage, similar to new the new programs recently rolled out in Kentucky and Indiana. 

Advocates worry that these new rules could cause vulnerable Medicaid enrollees to lose coverage, unable to either comply with the new requirement or complete the necessary paperwork to prove employment.

Virginia represents an interesting trade-off for Medicaid expansion advocates: whether it's worth expanding coverage to thousands of low-income Americans if it also means putting those people under a work requirement. 

Some groups are already staking out sides — saying that they can't support any Medicaid expansion tethered to a work requirement. 

"We are not going to be supportive of any effort trying to link health access to health insurance to a work requirement," says Frederick Isasi, executive director of the health advocacy group Families USA.

"It's obviously a complicated question," says Joan Alker, executive director of the Center for Children and Families at Georgetown University. "If you look at Indiana, which they say they're trying to model themselves on, a lot of people have gained coverage, and that's a good thing."

The shape of Virginia's Medicaid expansion plan — and whether it will become law — is still very much up in the air. While the state's House of Delegates did pass a budget funding Medicaid expansion, the Senate budget does not have that same provision. This means that the two houses will have to hash out this difference before sending anything to Gov. Ralph Northam.

Jill Hanken with Healthcare for All Virginians, a coalition that has led advocacy work around Medicaid expansion in the state, says this process could stretch on for months. 

"Our priority is to get coverage started up for 400,000 Virginians," she says. "The state hasn't gotten this close to expansion over the last four years. We are encouraged by the progress but acknowledge there is a long way to go before a solution is reached that will make a good program."

When asked whether her group could support a Medicaid expansion with a work requirement, Hanken said, "Getting the coverage is the priority. We think there are ways to help people improve their employment opportunities without being punitive."

Northam is also in an interesting place. He came into office an ardent supporter of Medicaid expansion — something his predecessor, Terry McAuliffe, had pursued aggressively too. He hadn't been able to get any traction with Republican state legislators. 

And even with the work requirement, he has been generally positive about the movement toward Medicaid expansion.

"I look forward to working with the House and Senate to finalize this proposal, ensure its passage and pursue an implementation plan that will provide the benefits of expanded coverage to Virginia families," Northam said in a statement this weekend. 

Meanwhile, there is still time for this deal to come together and change. Hanken said her group will focus on educating legislators over the next few weeks, possibly months. They'll be talking about the economic upside of the expansion while warning against a work requirement.

"As these discussions go forward, we'll certainly be making clear the type of program we prefer," she says.

With research help from Caitlin Davis

Today's top news

• “Anthem amends ER policy but stands behind decision not to pay for avoidable emergency care”: “Responding to numerous objections of its emergency room policy, Anthem has tweaked its decision not to cover ER visits if the medical condition is not an emergency. Providers have said it puts patients in harm's way when they have to decide whether their conditions constitute an emergency.” —Susan Morse, Healthcare Finance
• “Spending deals signal end of unpopular Obamacare cost checks”: “Republicans and Democrats finally found something they can agree on about Obamacare: killing unpopular policies that were supposed to pay for the law or reduce health costs. The recent congressional spending deals repealed or delayed several Obamacare taxes, as well as a Medicare cost-cutting board. Removing those powerful levers, which terrified health providers and unions, is not a good omen for efforts to control health spending, which is expected to surge in the next few years.” —Jennifer Haberkorn, Politico
• “Virginia’s House Republicans finally put their weight behind Medicaid expansion”: “Virginia’s Republican-controlled House of Delegates has created a draft state budget that expands Medicaid, dropping years of partisan resistance in the face of pressure from newly empowered Democrats. But the plan sets up a confrontation with the state Senate, which is also controlled by Republicans and did not include Medicaid expansion in the plan passed unanimously out of the Senate Finance Committee on Sunday evening.” —Gregory S. Schneider and Laura Vozzella, Washington Post

Analysis and longer reads

• “Why Health Care Spending Is Headed Higher”: “Health care spending in the U.S. is expected to grow at an average annual rate of 5.5 percent from 2017 through 2026, faster than the rate of GDP growth. As a result, health care spending will represent 19.7 percent of the economy by 2026, up from 17.9 percent in 2016. The estimates come from a new report by the Office of the Actuary at the Centers for Medicare and Medicaid Services.” —Michael Rainey, Fiscal Times
• “In An Effort To Curb Drug Costs, States Advance Bills To Prod Feds On Importation”: “For years, American consumers have tried to buy cheaper drugs from their northern neighbor, sometimes packing into buses for day trips to Canadian pharmacies, or patronizing American stores that help them order drugs from abroad. But the practice is illegal. The states want to change that, and set up a formal process that nets broader savings.” —Shefali Luthra, Kaiser Health News
• “Why The Nation’s Premier Health Care Wonk Has Given Up On Congress”: “'It doesn’t make any sense to spend any energy right now at the federal level,' [former CMS Administrator Andy] Slavitt said. 'There is a logjam that’s not going to get broken before 2020.' Instead, the United States of Care aims to serve as a kind of brain trust and troubleshooting resource for state governments seeking to expand coverage.” —Daniel Marans, Huffington Post