Sept 8 (Reuters) - Democratic Governor Terry McAuliffe proposed a plan on Monday to provide medical insurance for 25,000 uninsured Virginians, a move that falls short of his vow to expand coverage to 400,000 people despite Republican objections.
McAuliffe said in June after losing a fight with the Republican-controlled legislature over Medicaid, the federal-state healthcare program for the poor, that he would close the gap without lawmakers' help.
The 25,000 Virginians who would get insurance group about 20,000 people who are mentally ill and 5,000 children of state employees, the governor said in a statement.
The insurance expansion is part of a 10-point healthcare program that would affect more than 200,000 people, mostly by improving care for those already in Medicaid and boosting efforts to sign up Virginians who qualify for it but are not enrolled.
McAuliffe, who took office in January, said he would use $40 million in leftover state health care funds to provide coverage for the mentally ill.
Virginia also can include children of state employees because the 2010 Affordable Care Act, known as Obamacare, lifted a ban against enrolling them in the federal program, he said.
McAuliffe, a former head of the Democratic National Committee, campaigned in 2013 on increasing Medicaid coverage, a measure that he said would create 30,000 jobs in Virginia.
McAuliffe had linked the state's budget to Medicaid expansion. Republican state lawmakers inserted last-minute language into Virginia's two-year budget in June to block McAuliffe's proposed expansion to cover 400,000 uninsured Virginians.
McAuliffe had contended that accepting $2 billion in federal funds to expand Medicaid under the Affordable Care Act would create jobs, raise state salaries and bolster pensions.
Republican lawmakers opted not to accept the funds. (Reporting by Ian Simpson; Editing by Doina Chiacu)