Lessons in Medicaid from Route 460
Published 9:33 pm Saturday, June 28, 2014
In the wake of an Inspector General’s report on the handling by the administration of former Gov. Bob McDonnell of a public-private project to replace a segment of Route 460 between Suffolk and Petersburg, a couple of surprising and disturbing connections have become clear between that fiasco and our current governor’s push for Virginia to accept federal funds to expand Medicaid.
The two issues would be utterly dissimilar, except for a couple of points. Both represent pet projects for which their respective supporters in the Governor’s Mansion have shown themselves willing to go all in. And both — if current Gov. Terry McAuliffe follows through on his recent threats — could wind up as public-private partnerships when their gubernatorial sponsors fail to gin up the necessary legislative support to bring them to fruition in a more traditional manner.
Following the Virginia legislature’s passage this month of a long-delayed and bitterly contested budget, which failed to include the Medicaid expansion McAuliffe so dearly sought, the governor said he would seek a way to make it happen on his own, possibly through a public-private partnership.
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It seems we’ve been here before, and both McAuliffe and Virginia’s legislators would do well to read the internal state report on the machinations of the Route 460 partnership to see just how badly awry such processes can go when they’re handled without effective legislative or public oversight.
As with McDonnell’s too-cozy relationship with Star Scientific, the partnership between the state and U.S. 460 Mobility Partners could very well turn out to be within the letter of the law. But the gifts scandal with Star Scientific doesn’t pass the smell test for most Virginia voters, and neither does the Route 460 project.
Investigators have concluded the state’s contract for the Route 460 project assigned an unusually high degree of risk to the state for such a partnership. They uncovered evidence that the project was put on a fast track that ignored the likelihood of it running afoul of federal environmental regulations. And they concluded that McDonnell’s administration seemed a little too keen to keep its negotiations confidential.
At least two of those problems could arise again if the current governor insists on pursuing a public-private solution to Medicaid expansion that cuts out the state legislature. It’s likely any private entity joining the commonwealth on Medicaid would seek to shift as much risk as possible away from itself and onto taxpayers. And it’s questionable whether a governor unconstrained by oversight would negotiate a fitting deal that protects Virginia taxpayers on an issue that he considers so central to his perceived legacy.
One of the recommendations from the Route 460 project investigation is for a 30-day cooling-off period between completing contract negotiations and signing them into legal force.
But Virginians, who are now saddled with $300 million in startup costs for a project that may never get built, might wish for a cooling-off period for the whole concept of public-private partnerships — at least those negotiated by governors who, barred from running for a second term of office by the state constitution, therefore calculate an acceptably low level of political risk in taking matters into their own hands.