GOP Governors Lay Out Common-Sense Medicaid Reform

Back in the mid-'90s, when the Washington crowd was fighting over welfare reform, the GOP-controlled Congress looked to the states to find out what was working.

Under the leadership of then House Speaker Newt Gingrich, congressional Republicans borrowed generously from the successful reforms put in place by Michigan Gov. John Engler, Wisconsin Gov. Tommy Thompson, and others to guide them in the development of legislation that, after being vetoed twice, was ultimately signed into law by President Bill Clinton on the eve of his renomination at the Democratic National Convention in Chicago. [Check out a roundup of political cartoons on the budget and deficit.]

It was an extraordinary assertion of power by the nation’s GOP governors who, once again, are trying to take control of the debate over Medicaid reform.

On Monday, a letter written by 29 of them to Utah’s Orrin Hatch, the ranking Republican on the Senate Finance Committee, and House Energy and Commerce Committee Chairman Fred Upton of Michigan outlining seven guiding principles for Medicaid reform was made public.

“The principles will serve as the framework for future specific recommendations from the governors as they begin,” the Republican Governors’ Association said in a release, “what will be an ongoing dialogue with Congress as it weighs how to reform Medicaid." [Read Whispers: GOP Pushes Balanced Budget Amendment.]

The seven principles, which make a heck of a lot of sense, are:

1. States and territories are best able to make decisions about the design of their healthcare systems based on the respective needs, culture, and values of each state.
2. States and territories should also have the opportunity to innovate by using flexible, accountable financing mechanisms that are transparent and that hold states accountable for efficiency and quality healthcare. Such mechanisms may include a block grant, a capped allotment outside of a waiver, or other accountable and transparent financing approaches.
3. Medicaid should be focused on quality, value-based, and patient-centered programs that work in concert to improve the health of our states’ citizens and drive value over volume and quality over quantity, while at the same time containing costs.
4. States and territories must be able to streamline and simplify the eligibility process to ensure coverage for those most in need, and states must be able to enforce reasonable cost sharing for those able to pay.
5. States and territories can provide Medicaid recipients a choice in their healthcare coverage plans, just as many have in the private market, if they are able to leverage the existing insurance marketplace through innovative support mechanisms.
6. Territories must be ensured full integration into the federal healthcare system so they can provide healthcare coverage to those in need with the flexibility afforded to the states.
7. States must have greater flexibility in eligibility, financing, and service delivery in order to provide long-term services and support that keep pace with the people Medicaid serves. New federal requirements threaten to stifle state innovation and investment. In addition, since dual eligibles now constitute 39 percent of Medicaid spending, Medicare policies that shift costs to the states must be reversed, and the innovative power of states should be rewarded by a shared-savings program that allows full flexibility to target and deliver services, which are cost-effective for both state and federal taxpayers.

The reason for the letter is obvious to anyone who understands the situation. “Medicaid is on an unsustainable trajectory that threatens the fiscal health of our states and the nation,” RGA Policy Chairman and Mississippi Gov. Haley Barbour said.

Adding to that, Texas Gov. Rick Perry, the chairman of the RGA said, “Governors must be given the flexibility to craft solutions based on their states’ specific needs without constantly needing to ask the federal government for permission.” [Read the U.S. News Debate: Should Congress Raise the Debt Ceiling?]

“Aside from the full repeal of Obamacare, no issue is more important to fixing our nation’s healthcare system than improving Medicaid,” Perry, once again a potential candidate for president, continued.

There are those who argue that Medicaid, the nation’s program for providing low- and no-cost healthcare to the poor, is not in need of reform. They are, to put it gently, whistling past the graveyard. The program is over-burdened by bureaucratic red tape and represents the best of the 1960s-era “one size fits all” approach to problem solving. If it is to survive well into the 21st century, it has to be redesigned. The principles set out by the nation’s GOP governors seems as good a place to start as any and, in fact, may be the best ideas out there.

• Check out a roundup of political cartoons on the budget and deficit.
• Read the U.S. News Debate: Should Congress Raise the Debt Ceiling?
• Vote Now: Should Paul Ryan's budget plan become law?

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