GOP: Let states set own Medicaid rules

Mississippi Gov. Haley Barbour, policy chairman for the GOP Governors Association, prepares to discuss Medicaid. (JACQUELYN MARTIN / Associated Press)

Republicans want federal laws loosened and more state control of how the money is spent.

By Laurie Kellman, Associated Press

Posted: August 31, 2011

WASHINGTON - The nation's Republican governors, seeking a voice in Congress' forthcoming debt debate, on Tuesday pushed for loosening restrictions on how states spend money on health care for poor and disabled Americans.

States, they argued, should be allowed to design their own Medicaid programs and operate them with a lump payment every year from the federal government, and then be held accountable for the results. Outdated or inappropriate federal guidelines now make it more burdensome to provide a health-care safety net that's one of the biggest expenses for cash-strapped states, the governors said.

Medicaid should be custom-designed by each state to best provide care to children, the poor, and disabled without federal rules and the waivers required to get around them, their report said. "We should not have to come to Washington on bended knee and kowtow for waivers to do these kinds of things," Mississippi Gov. Haley Barbour said.

The governors, however, plan to come to Washington in October to pressure a select super committee of 12 House and Senate members to include the ideas in a plan for curbing the growth of the federal debt.

They are likely to be heard. House energy chairman Fred Upton (R., Mich.) joined Sen. Orrin G. Hatch (R., Utah) in requesting the report in May. Both are adamant that states have more control over how Medicaid money is spent.

The document is the most detailed plan yet released by Republican state and territorial leaders, who have long clamored for block grants that they say would save taxpayers billions of dollars, clear federal red tape, and allow them to innovate.

Politically, it's an acknowledgment of sorts that President Obama's health-care law might not be repealed or scaled back by Congress or the courts anytime soon. The 2010 health-care law expands the list of those covered by Medicaid from 69 million beneficiaries now to 95 million over the next decade. The Congressional Budget Office said the cost of the program in 2011 would be $275 billion.

The 31 proposals would allow states to do away with requirements set by the federal government on who is eligible and how health-care providers are reimbursed under Medicaid. Instead, each state and the federal government would jointly decide the program's goals and Washington would step in only when the targets aren't met.

Oversight would largely fall to the states under state-developed quality and cost guidelines. All federal taxpayer money now directed to combating waste, fraud, and abuse should be included in any state's block grant, the governors proposed.

The waiver process, described by state officials as burdensome, time-consuming, and often unnecessary, would itself be waived for "innovative programs that show a positive return on investment for both the state and federal governments."

The Obama administration has said that it built flexibility for the states into last year's health-care overhaul and that states will save money with more Americans insured.

Richard Sorian, a spokesman for the Department of Health and Human Services, said the Republicans' proposal would "reinstate a broken system."