Governors Call for More Flexibility on Medicaid Amid Budget Shortfalls
Democratic and Republican governors at a National Governors Association meeting in Washington, D.C., on Sunday agreed that the federal government should allow them more flexibility with Medicaid to help address budget deficits, although they displayed partisan differences on how to achieve that goal, the Washington Post reports (Goldstein/Balz, Washington Post, 2/27).
As most states deal with large budget deficits, many governors have taken issue with a provision in the federal health reform law that requires states to maintain Medicaid current eligibility standards until 2014, or face a loss of federal matching funding for the program (Millman, "Healthwatch," The Hill, 2/27).
Republican governors are pushing for a Medicaid grant system, under which states would receive fixed block grants to use as they choose, instead of the current federal matching system. The GOP governors said such a plan would allow them to use the system better, because they are more aware of their own states' needs.
Florida Gov. Rick Scott (R) said, "We would like the federal government to just give us a block grant because I could spend the money way better without all the strings attached."
Although states can apply for waivers that would allow them to alter eligibility requirements before 2014, some Republicans argued that the waiver system is too time-consuming and costly for states to be able to efficiently solve issues with Medicaid (Kliff, Politico, 2/27).
HHS Secretary Kathleen Sebelius has urged states to cut costs other ways, because she might not be able to grant waivers to states to reduce their Medicaid enrollment (Murray et al., Wall Street Journal, 2/28).
Democratic governors did not fully discount a grant system, but said grants might give states too much freedom to limit Medicaid benefits.
Most said a block grant system should include requirements for expanding insurance and improving the health of those in the programs, adding that changes in Medicaid rules should be handled by HHS in an experimental fashion, instead of through broad, permanent changes to the program (Washington Post, 2/27).
Oregon Gov. John Kitzhaber (D), vice-chair of NGA's health committee, said, "I'm not sure I'm opposed to block grants as long as there is accountability to actually [do] three things: expand coverage, reduce costs and improve health outcomes" (Politico, 2/27).
Obama Administration Makes Some Medicaid Concessions
On Friday, the Obama administration said it will allow states facing budget shortfalls to make certain cuts to Medicaid eligibility, such as raising premiums and dropping certain low-income adults.
Administration officials said states could raise premiums at the same rate as inflation and drop coverage for adults whose annual incomes are higher than $14,484, provided they are not pregnant or disabled (AP/New York Times, 2/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.