Republican governors announce proposals to overhaul Medicaid

By Julian Pecquet - 08/30/11 04:48 PM ET

The nation’s Republican governors on Tuesday released a detailed list of policies that would give them greater control over their Medicaid programs, one of states’ biggest expenditures.

The 31 recommendations include longtime Republican priorities such as repealing the healthcare reform law’s “maintenance of effort” requirement that forbids states from cutting their Medicaid rolls. The proposal doesn’t go as far as the House Republican budget, however, which would have cut federal Medicaid spending by more than $700 billion over 10 years by turning the program into a federal block grant.

“Cost-shifting and cost-saving are not the same,” Virginia Secretary of Health and Human Resources Bill Hazel told reporters at a briefing. “We do as states have concerns that federal savings will turn into cost-shifting to states; there’s no doubt that that is a legitimate tension point here.”

The proposal does allow for states to ask for block grants that give them more flexibility, as long as the grants meet their needs.

Other proposals include allowing pilot programs, having the federal government cover the cost of illegal immigrants who get Medicaid-funded emergency room care and extending Medicare’s coverage of nursing home care by 60 days so Medicaid doesn’t have to pick up the slack.

The Obama administration says it is ready to work with governors to make the program more flexible, while rejecting Republicans' calls to repeal the law.

"Repealing the Affordable Care Act, as the Republican Governors Association report recommends, would increase health care costs for middle class Americans and reinstate a broken system that holds our economy back and allows health care costs to skyrocket," said Health and Human Services spokesman Richard Sorian. "We remain committed to working with governors of both parties to provide as much flexibility in Medicaid as possible while protecting the people it serves."

Mississippi Gov. Haley Barbour (R), chairman of the healthcare task force that put together the report, said it could influence the deficit-cutting supercommittee charged with slashing federal spending by $1.5 trillion.

“We began this work before there was a supercommittee,” Barbour said. “But I think they will find it helpful … Many of these solutions will save money but also improve the quality of care, and that ought to be — and I expect is — exactly what the Congress is and should be looking for.”