President Obama is moving to quell a rebellion among the ranks of the nation’s governors, who want more of a say in how billions of dollars in shared health care dollars are spent.
At a working session Sunday, several governors called for turning the joint federal-state Medicaid program into a system of “block grants,” where they would be able take federal dollars and spend them as they see fit.
That’s something long pushed by Republicans, and long opposed by Democrats.
Instead, however, at the governor’s annual visit to the White House Monday, President Obama offered a much smaller concession to health spending flexibility: Endorsement of a bipartisan proposal to allow states to opt out of most of last year’s health law’s requirements sooner than was originally envisioned when the law was passed.
“Beginning in 2017, if you can come up with a better system for your state to provide coverage of the same quality and affordability as the Affordable Care Act, you can take that route instead,” Obama told the governors.
And Obama said he supported moving that date up to 2014, as proposed by Sens. Ron Wyden, D-Ore., and Scott Brown, R-Mass., to “give [governors] flexibility more quickly, while still guaranteeing the American people reform.”
A lot of people have called this the “calling their bluff” proposal. And Sen. Wyden, who’s been shopping the bill around to both Democratic and Republican governors, doesn’t completely disagree.
“You’ve got a lot of states where Republican governors, Republican legislatures, are clearly going to have their ideas about health reform,” Wyden said in an interview. “As long as they meet the coverage requirements in the bill, they can do it. And progressive folks are gonna try the same kinds of approaches.”
In fact, noted Wyden, Vermont Gov. Peter Shumlin is pushing for the idea of having a“single payer” system rather than requiring everyone to have private health insurance.
Republicans governors, however, aren’t yet embracing Wyden’s proposal, or President Obama’s promise of more flexibility in health care spending.
“He says very nice things and he says them very nicely,” said Gov. Chris Christie, R-N.J. “But in the end I have a job to do, and what I’d like is to have the flexibility to exercise the authority that the people of New Jersey gave me in November of 2009.”
Meanwhile, Kansas Republican Gov. Sam Brownback, echoing the concerns of many governors, says what he really wants isn’t more flexibility when it comes to the health care law, but for Medicaid.
“Medicaid is creating a huge hole in my budget and we had to take money from all other places in state government to fill the Medicaid hole,” Brownback said.
On Tuesday several governors will testify before the House Energy and Commerce Committee on the impact of the new health law on Medicaid and state budgets. It’s a hearing that’s expected pour more fuel on the fire of the ongoing health wars.
Text of the President’s remarks on healthcare reform
Which brings me to the final topic that’s going to help determine our ability to win the future, and that’s getting control of our health care costs. Now, I am aware that I have not convinced everybody here to be a member of the Affordable Care Act fan club. But surely we can agree that for decades, our governments, our families, our businesses watched as health costs ate up more and more of their bottom line. There’s no disputing that. That didn’t just happen last year. It didn’t just happen two years ago. It’s been going on for years now.
We also know that the biggest driver of the federal debt is Medicare costs. Nothing else comes close. We could implement every cut that the House of Representatives right now has proposed and it would not make a dent in our long-term budget, wouldn’t make a dent in our long-term deficits — because of healthcare costs. We know it’s one of the biggest strains in your state budgets — Medicaid.
And for years, politicians of both parties promised one thing: real reform. Everybody talked about it. Well, we’ve decided to finally do something about it — to create a structure that would preserve our system of private health insurance; would protect our consumers from the worst abuses of insurance companies; would create competition and lower costs by putting in place new exchanges, run by the states, where Americans could pool together to increase their purchasing power and select from various plans to choose what’s best for them — the same way that members of Congress do, the same way that those who are lucky enough to work for big employers do.
And the fact is, that the Affordable Care Act has done more to rein in rising costs, make sure everyone can buy insurance, and attack the federal deficit than we’ve seen in years. And that’s not just my opinion; that’s the opinion of the Congressional Budget Office — nonpartisan — the same one that puts out numbers that when it’s handy to go after me, people trot out and say, boy, these are — look at these numbers. So they’re saying we’re saving a trillion bucks because of this act on our health care costs. Otherwise, we’d be a trillion dollars more in the red. That’s something that we should build on, not break down.
Now, that doesn’t mean that the job of health care reform is complete. We still have to implement the law, and we have to implement it in a smart and non-bureaucratic way. I know that many of you have asked for flexibility for your states under this law. In fact, I agree with Mitt Romney, who recently said he’s proud of what he accomplished on health care in Massachusetts and supports giving states the power to determine their own health care solutions. He’s right. Alabama is not going to have exactly the same needs as Massachusetts or California or North Dakota. We believe in that flexibility.
So right now, under the law, under the Affordable Care Act,
Massachusetts and Utah already operate exchanges of their own that are very different — operate them in their own way. And we made sure that the law allowed that. The same applies for other requests, like choosing benefit rules that meet the needs of your citizens, or allowing for consumer-driven plans and health savings accounts.
And this recognition that states need flexibility to tailor their approach to their unique needs is why part of the law says that, beginning in 2017, if you can come up with a better system for your state to provide coverage of the same quality and affordability as the Affordable Care Act, you can take that route instead. That portion of the law has not been remarked on much. It says by 2017, if you have a better way of doing it, help yourself, go ahead, take that route.
Now, some folks have said, well, that’s not soon enough. So a few weeks ago, Oregon Senator Ron Wyden, a Democrat, and Massachusetts Senator Scott Brown, a Republican, and Louisiana Senator Mary Landrieu, they proposed legislation that would accelerate that provision. So it would allow states to apply for such a waiver by 2014 instead of 2017.
I think that’s a reasonable proposal. I support it. It will give you flexibility more quickly, while still guaranteeing the American people reform. If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does — without increasing the deficit — you can implement that plan. And we’ll work with you to do it. I’ve said before, I don’t believe that any single party has a monopoly on good ideas. And I will go to bat for whatever works, no matter who or where it comes from.
I also share your concern about Medicaid costs. I know this has been a topic of significant conversation over the last couple of days. We know that over half of all Medicaid costs come from just 5 percent of enrollees, many of whom are what’s called dual eligibles — seniors in Medicare as well as in Medicaid. The Affordable Care Act helps address this by changing the incentives for providers so that they start adopting best practices that will work to reduce cost while improving quality.
But we understand the pressure you’re under. We understand that we’ve got to do more. So today — and I mentioned this to Christine last night — I’m asking you to name a bipartisan group of governors to work with Secretary Sebelius on ways to lower costs and improve the quality of care for these Americans. And if you can come up with more ways to reduce Medicaid costs while still providing quality care to those who need it I will support those proposals as well.
So here’s the bottom line. Once fully implemented, I’m convinced the Affordable Care Act will do what it was designed it to do — cut costs, cover everybody, end the worst abuses in the insurance industry, and bring down our long-term deficits. I am not open to re-fighting the battles of the last two years, or undoing the progress that we’ve made. But I am willing to work with anyone — anybody in this room, Democrat or Republican, governors or member of Congress — to make this law even better; to make care even better; to make it more affordable and fix what needs fixing.
You see, part of the genius of our Founders was the establishment of a federal system in which each of our states serves as a laboratory for our democracy. Through this process, some of the best state ideas became some of America’s best ideas. So whether it’s through Race to the Top, or improving the Affordable Care Act, or reforming the way that we approach social programs by ensuring that spending is tied to success, our approach has been to give you the flexibility that you need to find your own innovative ways forward. In fact, this week I’m issuing a Presidential Memorandum that instructs all government agencies to follow this flexible approach wherever the law allows.
But even as we preserve the freedom and diversity that is at the heart of federalism, let’s remember that we are one nation. We are one people. Our economy is national. Our fates are intertwined. Today, we’re not competing with each other; we’re competing with other countries that are hungry to win new jobs, hungry to win new industries.
I’m confident we will win this competition as long as we’re fighting it together. And I know that, whatever our differences, you share that goal. So you’ve got a partner in the White House to make this happen. And I hope that this becomes the start of a productive and serious conversation going forward — one that I want to start by answering some of your questions.
This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.