The Senate committee that killed legislation to expand Medicaid has adopted an alternative plan for redesigning the program to extend health coverage and services, but for fewer people with less federal funding to match state spending than expansion under the Affordable Care Act.

The Senate Education and Health Committee approved Senate Bill 915, proposed by Sen. Siobhan S. Dunnavant, R-Henrico, on an 8-7, party-line vote on Thursday and referred it to the Finance Committee to consider as part of an escalating political battle over whether to expand Virginia’s Medicaid program and, if so, how.

Her bill would create a “priority needs access program” by redesigning existing Medicaid waivers that offer limited services to people with mental health and substance use disorders. Dunnavant, an obstetrician, proposes to expand both the services offered and the number of people who would receive them, using a new tax on hospital profits to help pay for them.

Chairman Steve Newman, R-Lynchburg, who also serves on Finance, said the bill is one of several legislative vehicles for a debate that he hopes extends beyond Medicaid to ways of lowering the cost of health insurance in the private market.

“It is unstable, unsustainable and it is killing our constituents,” Newman said.

While Republicans voted in a bloc in favor of Dunnavant’s bill, some said they are withholding judgment about its merits.

“I’m not sure how much of your bill I support, but I think we need to continue the discussion,” Sen. Mark Peake, R-Lynchburg, told Dunnavant.

Gov. Ralph Northam’s administration opposed the bill as an inadequate alternative to Medicaid expansion, but said it’s willing to discuss Dunnavant’s goals and ideas for achieving them.

“We see this is an ongoing discussion and continuing dialogue across the aisle in both houses to try to reach common goals,” said Secretary of Health and Human Resources Daniel Carey, a cardiologist and former hospital official in Lynchburg.

Democrats want to expand Medicaid to a much broader population under the Affordable Care Act. They said Dunnavant’s proposal does not add up because it would leverage far fewer federal dollars to serve fewer people, while imposing a similar tax on hospitals as the one then-Gov. Terry McAuliffe proposed in the two-year state budget to pay the state’s share of costs for fully expanding the program.

“I love you, senator, but I’d hate to see you running one of my businesses,” Minority Leader Dick Saslaw told Dunnavant.

Virginia’s hospitals also opposed the bill. Dunnavant introduced it with an extensive budget amendment that would include a promise to raise the reimbursement rate the state pays health providers for treating Medicaid patients.

“The math simply does not work for the industry being asked to contribute resources,” said Chris Bailey, executive vice president of the Virginia Hospital and Healthcare Association, which says it would support a provider assessment to expand Medicaid only if the state includes safeguards in the law over how the money would be used.

Dunnavant and hospital officials do not even agree how many people would be served under the program. She estimates 75,000 to 100,000 people could receive treatment for mental health, substance use and chronic medical conditions, while Bailey suggested the number would be between 20,000 and 30,000.

No fiscal impact statement has been filed with the legislation to assess its costs and benefits.

Sen. Amanda Chase, R-Chesterfield, strongly supported the bill as “a good solution” for many of the health care challenges faced by Virginians who cannot afford medical treatment.

“I do not see this as Medicaid expansion,” Chase said. “I see this as honoring an obligation we already have.”

Jill Hanken, senior attorney at the Virginia Poverty Law Center, said there is no comparison between Dunnavant’s plan and the pending proposal to use $3.2 billion in federal funds to expand Medicaid coverage to 400,000 uninsured Virginians.

“We are really talking about apples and oranges,” Hanken said.

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Senate committee backs Dunnavant alternative to Medicaid expansion