RICHMOND — The Virginia Senate and House of Delegates set the stage for negotiations over expanding Medicaid today when they passed competing plans to amend the state’s two-year budget.

The Senate approved a budget provision that would allow Virginia expand Medicaid eligibility in January 2014 if the state agency administering the program can obtain federal approval of cost-containment reforms. At least 250,000 low-income Virginians could gain coverage if the state proceeds with Medicaid expansion under the Patient Protection and Affordable Care Act.

Gov. Bob McDonnell has said that he opposes expanding the state-federal Medicaid without reforms, and has questioned the federal government’s ability to keep its funding commitment.

The Republican-dominated House of Delegates took a more deliberate approach than the Senate. It approved a provision that would require the federal government to approve the state’s reforms before the General Assembly voted on authorizing expansion in its 2014 session. Democrats argued that would delay implementation and cost the state up to $3 billion in federal funds tied to expanding the program, which serves poor, disabled and elderly populations.

The federal government will pay for 100 percent of the increased Medicaid enrollment for three years beginning in 2014 and gradually reduce its share to 90 percent by 2020. Virginia would receive $23 billion in federal funds for the expansion through 2022. The state’s cost over the same period would be an estimated $137.5 million.

The Senate’s Medicaid provision won over Democrats who had voted against the budget plan in the Senate Finance Committee on Sunday. The full Senate passed its budget bill Thursday by a vote of 36-4 vote.

“I would hope that we would seize this opportunity with enthusiasm and recognize it for the historic opportunity that it is,” said Sen. John Edwards, D-Roanoke.

Sen. Emmett Hanger, R-Augusta County, said lawmakers have struggled with the political and financial implications of expanding Medicaid.

“If we can adopt this amendment, it will create a clear path forward for us to be able to do it Virginia’s way;  to reform Medicaid and, at the same time, provide the services that we want to provide, that our citizens require and demand, and under the provisions of the Affordable Care Act they will already be paying for,” Hanger said.

In the House, Republican leaders said they remain reluctant to commit fully to Medicaid expansion.

“How on earth is that going to happen with a federal government that’s not only broke, but it totally broke?” said House Majority Leader Kirk Cox, R-Colonial Heights.

The House passed its budget by a vote of 74-22. Each house will vote on the other’s budget plan next week and negotiators from the two chambers will work toreconcile differences between the bills. The bills revise the $86.5 billion budget that expires June 30, 2014.

– Michael Sluss