Some Republican governors wary of House GOP’s Medicaid reform proposals

Several Republican governors are raising concerns with a House GOP Medicaid reform proposal that’s expected to be reintroduced shortly.

The Republican budget that the House approved last year would have replaced the Medicaid program with a block grant that gives states more flexibility to run their programs while cutting federal funding for the health program for low-income Americans. Budget Committee Chairman Paul Ryan (R-Wis.) is expected to propose a similar approach again when he releases his FY 2013 budget this month or next.

{mosads}A couple of former Republican governors however told The Hill this past week that the block grant proposal may not work for their states.

Block grants have an “inflammatory connotation,” said former Vermont Gov. Jim Douglas, who was in office from 2003 to 2011.

“My view is that there’s an awful lot of room between the status quo and block grants in terms of greater flexibility and in terms of refining the partnership between the states and the federal government,” Douglas said. “What we agreed to in Vermont was a cap over five years that we would not exceed in exchange for more flexibility… That was very successful and continues to be, so I think there are ways to provide greater flexibility without going to a block grant.”

Former South Dakota Gov. Mike Rounds, who also served from 2003 to 2011, raised concerns that block grants may restrict states’ funding without giving them enough flexibility to deal with the fallout.

“I think there is a possibility with a block grant that it could work,” he said, “but only if the authority to make changes went along with the block granting.”

Fat chance, said Bruce Lesley, president of the children’s advocacy First Focus. He points out that Ryan’s block granting proposal merely changes how states get their Medicaid money; the hard work of figuring out just how much flexibility they’d really have – whether they could bump children or seniors off the rolls, or limit prescription drug benefits, or any other substantive changes – would still have to be worked out in the House and Senate committees of jurisdiction.

“All block granting does is it changes the financing,” Lesley said. “There’s no real promise of flexibility (and) the governors are starting to realize that they’re just going to be left holding the bag.”

House Republicans led by then-Speaker Newt Gingrich (R-Ga.) tried the same approach in 1995, only to see their Medicaid block granting proposal vetoed by President Bill Clinton who was then able to run for re-election as the program’s champion. Lesley recalled that the proposal led to pandemonium as Republicans were forced to take tough votes on which Medicaid provisions to keep out of states’ reach.

If block granting ever came back on the table, he said, “all the advocates would definitely push to keep the provisions for the populations they represent in place.”

Douglas and Rounds were in town this week to unveil a new Bipartisan Policy Center report calling for greater flexibility in the program.

Separately, Republican Gov. Scott Walker – a key champion of his fellow Wisconsinite Ryan’s block grant approach last year – told a trade publication last weekend that block granting should be an option for states, not a requirement as was the case in the 2012 House budget.

“Let us opt in or opt out,” Walker reportedly told Inside Health Policy while he was attending the National Governors Association winter meeting.

“Block grants would bring a truce to the tug-of-wars between Washington and the states,” Walker wrote in the New York Times in April 2001. “This is the best option for Medicaid, facing a midlife crisis, to survive.”

At the time, he made no mention of making it an option for states. The offices of Gov. Walker and Rep. Ryan did not return requests for comment.

Democratic governors, by and large, have assailed Ryan’s proposal.

“I think it’s a terrible idea, for the reason that it solves the federal government’s problem of containing its Medicaid costs but it doesn’t begin to solve my problem of providing healthcare to people in the state,” said former Gov. Phil Bredesen (D-Tenn.), who served from 2003 to 2011.

“Every time that there is one of these things in which ‘here’s a block grant and you have more flexibility to deal with it, the flexibility is never remotely enough to actually deal with the issue,” Bredesen said. “Accepting the block grant idea puts you in the position of, we’re still going to have the responsibility, we’re still going to have a pile of constraints on how we operate the program, and now the federal government has limited their involvement.”