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Governors differ on extent of flexibility
for Medicaid
By Amy Goldstein and Dan Balz
Washington Post Staff Writers
Monday, February 28, 2011
Democratic and Republican governors, burdened by crushing budget
pressures from Medicaid, said Sunday that federal officials should
allow them more freedom to change eligibility rules and other aspects
of the public health insurance program for the poor. But they displayed
sharp ideological differences over how far such flexibility should go.
After a series of private conversations at the National Governors
Association’s semiannual meeting over the weekend, leaders of the group
formed a bipartisan committee to explore in detail what kind of
flexibility over Medicaid the governors can agree to seek from federal
health officials.
It remains unclear whether they will be able to forge such common
ground, given their partisan disagreements over both Medicaid and the
new federal law to reshape the health-care system. “The closer
governors get to Washington, the more they start acting like members of
Congress,” said Oregon Gov. John A. Kitzhaber (D), vice chairman of the
NGA’s Health and Human Services Committee, referring to the rancorous
debate over health care that persists on Capitol Hill.
Several conservative governors urged Congress and the Obama
administration to convert Medicaid, a pillar of the nation’s social
safety net for nearly half a century, from an entitlement program to a
block grant. The idea would be similar to the profound change that
welfare underwent in the mid-1990s, when the government began to give
states a fixed sum of money each year, along with latitude to spend it
as they wanted.
“I’d like to have a block grant so we could make adaptations, state by
state, as we see fit,” said Wisconsin Gov. Scott Walker (R), the new
chairman of the health and human services panel. Walker, who has drawn
large protests and national attention for a proposal to disempower his
state’s public employee unions, took part in the meetings by telephone.
On the other hand, Kitzhaber said, if governors are to get extra
maneuvering room to stray from Medicaid’s rules, they must in turn be
held accountable for expanding insurance coverage and improving the
health of people in the program. Kitzhaber, a physician by training,
also said that deviations from Medicaid rules should be handled by the
Health and Human Services Department as case-by-case “demonstrations” -
or temporary experiments, rather than broad, permanent changes to the
program.
Medicaid provides health coverage for about 53 million lower-income
Americans and is a shared responsibility of the federal government and
states. The federal government picks up, on average, about two-thirds
of the costs and sets minimum rules for which groups of people must be
covered and what medical benefits must be included. States are free to
go further, and most do.
Lately, Medicaid has become entangled in the massive fiscal
difficulties facing states and the polarized politics surrounding the
health-care law that Congress enacted 11 months ago.
The program’s overall expenditures are predicted to increase by nearly
7 percent in fiscal 2010, and the states’ share of Medicaid spending is
projected to increase nationally by $25 billion in 2011, according to
HHS’s Centers for Medicare and Medicaid Services.
The law will, starting in 2014, lead to an expansion of Medicaid to an
anticipated 20 million people with somewhat higher incomes, with the
federal government paying for the new recipients for several years.
It has become a mantra among Democratic and GOP governors alike that
they cannot afford the Medicaid program they have now. In their budget
proposals for the coming year, many are recommending cuts in Medicaid
services and in payments to some doctors, hospitals and other providers
of care for patients in the program.
Traditionally, states also have been free to slow Medicaid spending by
reining in who is eligible for the program. But most states now cannot
make it harder to join, because of maintenance-of-effort rules in the
new health-care law and a 2009 law, intended to stimulate the weak
economy, that gave states extra Medicaid money that is ending this
summer.
Last month, the nation’s Republican governors wrote to the president
and congressional leaders, asking for those rules to be removed. They
revived the issue with their fellow governors. “I had to come up with
$540 million to plug the Medicaid hole. I think we have gotten way too
liberal with eligibility,” Iowa Gov. Terry Brandstad (R) said. “The
federal government, with the maintenance of effort, has really tied our
hands.”
Mississippi Gov. Haley Barbour (R) said states should also be free, for
instance, to compel Medicaid patients to pay for part of their
medicine, saying, “We have people pull up at the pharmacy window in a
BMW and say they can’t afford their co-payment.”
Some Republicans said that the Medicaid constraints are reason to
reopen debate over the entire new-health care law. Kitzhaber countered
that the discord over the law’s constitutionality is getting in the way
of a meaningful discussion of how to improve the quality and
cost-efficiency of the health-care system as a whole. He urged fellow
governors to “recast this debate, not as about health care but about
health. If we can change the frame, there is a lot of agreement.”
Read it at The Washington Post
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