Dem governor: Obama Medicaid plan could pose 'huge problem'

Washington Gov. Christine Gregoire (D) said states could have a "huge problem" with President Obama's proposal to cut Medicaid spending.

The federal government and the states share the cost of Medicaid and the Children's Health Insurance Program based on a series of complex formulas. Obama has proposed "blending" those various formulas into a single percentage of federal support.

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"If 'blended rates' is code for cutting benefits and cutting people, that is going to be a huge problem to the states," Gregoire said Friday during a conference call organized by the Health and Human Services Department.

Gregoire, who chairs the National Governors Association, said states are open to discussing a blended rate if it's intended to help them improve their Medicaid programs.

"If, on the other hand, it's code for dramatic cuts, that’s another situation," she said, adding that most governors believe that's what it is.

The White House has said a blended rate would save the federal government roughly $100 billion. And in negotiations over the debt ceiling and accompanying spending cuts, Obama has proposed the blended rate as an alternative to Republican proposals that would convert federal funding into block grants to the states.

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