Oct. 18, 2013

RICHMOND, Va. — The federal government is again open for business, and Republicans in Washington are licking their wounds from the failed Tea Party attempt to derail President Obama’s health care overhaul. But here in Virginia’s capital, conservative activists are pursuing a hardball campaign as they chart an alternative path to undoing “Obamacare” — through the states.

One leading target is Emmett W. Hanger Jr., a Republican state senator from the deeply conservative Shenandoah Valley, who prides himself on “going against the grain.” As chairman of a commission weighing one of the thorniest issues in Virginia politics, whether to expand Medicaid under Mr. Obama’s Affordable Care Act, he is feeling heat from the Republican right.

His openness to expansion has aroused the ire of Americans for Prosperity, the conservative advocacy group backed by the billionaire industrialist brothers Charles and David Koch. Dressed in emerald green T-shirts bearing the slogan “Economic Freedom in Action!” its members are waging what the senator calls “an attempt to intimidate me” in Richmond and at home.

They have phoned his constituents, distributed leaflets and knocked on 2,000 doors in his rural district. When the Republican town committee met Monday night in Mr. Hanger’s home county, Augusta, Americans for Prosperity was there.

In Richmond on Tuesday, hundreds of volunteers in green shirts turned out for a commission hearing, bused in by the advocacy group’s field organizers, who provided Subway sandwiches for lunch.

“This has been one of those trench warfare kind of efforts for a year now, and I think it is one of those hidden stories of the whole fight against Obamacare,” said Tim Phillips, president of Americans for Prosperity. “It’s not flashy; it’s just in a whole bunch of state capitals and in the districts of a whole lot of state legislators, but it’s such a crucial aspect of the overall long-term effort to roll back Obamacare.”

The state-by-state strategy represents a split from the course pursued by Heritage Action for America and its sister organization, Heritage Foundation, which drove the “defunding Obamacare” movement that led to the recent government shutdown. In an opinion article published Friday by The Wall Street Journal, Jim DeMint, the foundation president, made no apologies. “Obamacare will now be the issue for the next few years,” he wrote.

Expanding Medicaid, a joint federal-state program for the poor, is critical to the law’s goal of covering the nation’s 48 million uninsured. Hospitals and insurers were also counting on more Medicaid patients to make the economics of the law work. For states, the terms seemed attractive: The federal government would pay 100 percent of the cost of new enrollees for the first three years, 90 percent after that.

But in June 2012, the Supreme Court ruled that states could opt out of Medicaid expansion. The ruling opened the door for conservative opponents of the law. Americans for Prosperity, with paid staff members in 34 states, walked through it. So did another group, Tea Party Patriots, which recently gave $20,000 to organizers of a referendum drive to put the question of Medicaid expansion on the Arizona ballot.

Americans for Prosperity has spent millions in states around the country, including Arkansas, Florida, Ohio, Louisiana, Michigan and Pennsylvania, to run the kind of aggressive campaign that it is now waging here in Virginia, where much will depend on the governor’s race. The Democratic candidate, Terry McAuliffe, who leads in the polls, favors expansion. The Republican candidate, Kenneth T. Cuccinelli II, is opposed.

So far roughly half the states are moving forward with Medicaid expansion, and an increasing number of Republican governors are expressing interest. Michigan, where Gov. Rick Snyder recently signed Medicaid expansion legislation into law, was “a tough loss,” Mr. Phillips conceded. In Ohio, Gov. John R. Kasich wants to expand. So does Gov. Tom Corbett in Pennsylvania, even though the legislature has already rejected it.

“This is going to be an issue all through 2014 for us,” said Jennifer Stefano, a former television reporter who runs Americans for Prosperity’s Pennsylvania chapter. “I don’t believe this fight is in Washington or ever was. I think this is a street fight. It’s a man to man, so to speak, fight of going door to door.”

That, at least, is the way the battle is being waged here in Virginia, where Mr. Hanger, a 30-year veteran of state politics, is navigating politically treacherous waters.

His panel, formed after the State House and Senate could not agree, must evaluate whether the state Medicaid program has put in place certain changes to improve care and cut costs. It has five members from each chamber; the program can be expanded only if three from each chamber agree. So far, four House members are opposed.

Mr. Hanger said he had not made up his mind, but added, “It makes absolutely no sense to not utilize those federal dollars when we have this unmet need.”

But he will put off a vote until after the election for governor on Nov. 5. Referring to Mr. Cuccinelli, he said, “If he’s elected, we can talk about it,” adding, “If I can present enough evidence about reform and revenue flows, I think he can be convinced.”

Mr. Hanger is not the only target of Americans for Prosperity. Another Republican commission member, State Senator John C. Watkins, complains that the group, which is not required to disclose its donors, is sending misleading mailings to his constituents.

“They related Medicaid expansion to defeating Obamacare, and they ignore the fact that the Affordable Care Act is the law,” he said. “I think their tactics are very deceptive.”

Tuesday’s hearing offered a peek into the group’s organizing prowess. Many of the advocacy group’s organizers are young, like Miranda Robinson, 21, a regional field manager. She dislikes Mr. Obama: “We have different morals,” she said. But before working for Americans for Prosperity, she paid scant attention to his economic policies.

Ms. Robinson arrived at 7:30 a.m. for a session that did not begin until 1 p.m., and she spent the day herding people on and off buses and keeping volunteers fed. She brought along her youth pastor, Justin Dehart, who said his youth group recently knocked on doors for Americans for Prosperity, which donated money to the youth program.

As many as 400,000 of Virginia’s one million uninsured residents would be eligible for coverage under an expanded Medicaid program, although Katharine M. Webb, senior vice president of the trade association representing Virginia hospitals, estimates that only 250,000 would enroll.

Ms. Webb said Virginia has a decade of experience with managed care for mothers and children, experience that could be transferred to childless adults covered by Medicaid. She sees the state taking “a thoughtful, policy-driven approach,” and marvels that Virginia has not yet rejected expansion, as other states have.

“We’re still alive in Virginia,” Ms. Webb said, “and that’s a miracle.”

In making its case, Americans for Prosperity taps into deep unease its members feel with the size and scope of the federal government. It argues that the federal government will never make good on its obligation to pick up the cost. Citing a University of Virginia study that found worse surgical outcomes for Medicaid patients than for the uninsured, it contends that Medicaid coverage is worse than no coverage at all.

Critics say that interpretation is deeply flawed because the uninsured tend to be healthier than people on Medicaid. But leaders of Americans for Prosperity like Dave Schwartz, a seasoned political operative who is the group’s director in Virginia, cite the study often.

“The folks that need the most help will get hurt the most if you expand Medicaid,” Mr. Schwartz told the panel on Tuesday.

The hearing lasted six hours; about 125 people testified, with about twice as many favoring Medicaid expansion as against. Consumer advocates and members of the AARP also turned out, wearing bright blue “Everyone Needs Coverage” T-shirts.

One of Mr. Hanger’s constituents, Georgia Long, a nurse and member of Americans for Prosperity, was there in a green shirt, sounding exasperated. Mr. Hanger, who is not up for re-election until 2015, has already survived one Republican primary challenge, and Ms. Long would like to see him face another.

“Emmett Hanger is hardheaded,” she said. “I would like to pressure him into being more fiscally conservative.”

Mr. Hanger, who once landed on a “Virginia’s Least Wanted” poster put out by the Washington anti-tax crusader Grover Norquist, seems unconcerned, though he says it irks him that “outside groups” are trying to influence Virginia politics. “I’m somewhat frustrated with them on that,” he said, “so perhaps I am hardheaded.”