Republican governors, asking for greater flexibility to design Medicaid programs as their states face massive budget gaps, are pushing for the federal government to provide Medicaid block grants.
The governors, upset with the new healthcare reform law’s requirement for states to maintain Medicaid eligibility standards until 2014, said block grants would provide states with the flexibility to tinker with the safety net for the poor in a responsible way.
Under the healthcare overhaul enacted 11 months ago, states stand to lose a federal match for their Medicaid programs if they tighten enrollment standards before 2014, when new state health insurance exchanges open. But with most states facing billion-dollar budget deficits, more than half of the nation’s governors have urged the Obama administration to ease the Medicaid requirement.
However, the administration is less than eager to offer waivers for the reform law's so-called “maintenance of effort” Medicaid requirement. The Department of Health and Human Services has been stressing that the law already provides flexibility to the states to change their Medicaid programs without dropping beneficiaries.
Not buying the flexibility argument, Republican governors during the NGA meeting embraced the idea of providing Medicaid block grants that would allow the states to shape Medicaid programs.
“I’d love to have a block grant so we can make adaptations state by state the in way we see best fit,” said Wisconsin Gov. Scott Walker (R), who joined the meeting by conference call.
Democrats, however, expressed skepticism over a block grant program. Delaware Gov. Jack Markell (D) said it would limit access to healthcare in a time of economic crisis.
“Funding would remain level as demand’s increasing, leavings states with one option – cutting services at a time when they’re most needed,” Markell said.
Oregon Gov. John Kitzhaber (D) said he understood the Republican governors’ joint push for block grants.
“People are very frustrated with the micromanagement of the Medicaid program,” he told The Hill.
Kitzhaber said that block grants, if they were provided, must set conditions for health metrics. However, he said he isn’t optimistic that Congress would take up block grants or other major reforms to Medicare and Medicaid.
“I don’t believe Congress has got the collective will, whether they’re Democrats or Republicans, to get into the delivery system side of this,” he said. “That’s where the problem is.”