health care

Obamacare Repeal Bill Gets Chilly Reception From GOP Governors, Despite Including Key Medicaid Changes They Wanted

The Obamacare repeal bill landed with a thud, but the idea of pushing more Medicaid decision-making to the state level is likely to stick.

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Joe Burbank/TNS/Newscom

It's telling that even Republican governors are not exactly thrilled with the Obamacare repeal-and-replace bill unveiled this week by House GOP leaders—despite the fact that those governors played a role in crafting the bill, which includes one of their major requests for changing how Medicaid costs are handled.

On a day full of chilly receptions for the repeal-and-replace proposal, Wisconsin Gov. Scott Walker issued one of the few semi-warm welcomes. In a statement released Tuesday, Walker said the GOP health care bill was "an important first step" but called for more work to be done.

"Medicaid reforms in @HouseGOP plan send power back to the states," he later tweeted, highlighting what many Republican governors see as a crucial reform.

Some of his fellow GOP governors were less impressed.

"Right now I am very, very discouraged and disappointed with what House Republicans are introducing," Maine Gov. Paul LePage said told radio station WVOM on Tuesday, when asked about the health care bill. "We don't know what the cost is, but based on what I see and I'm reading and what has happened over the last 15 years, I don't think it's an improvement. I think we're punting the ball, is what we're doing."

In Illinois, Gov. Bruce Rauner, another Republican, said his state "won't do very well under the changes they're recommending," according to the Associated Press.

"I support changing [the Affordable Care Act] but we've got to be thoughtful about it," Rauner said.

The Affordable Care Act is a federal law, of course, but any effort to change or repeal it will impact state budgets in significant ways, mostly because of the joint federal-state funding process for Medicaid, which provides health insurance for the poor. Getting Republican governors on-board with the repeal-and-replace plan is essential, which is why the White House hosted several governors in late February for meeting with President Donald Trump.

"At the end of the day, it's the governors and the states who are going to be implementing this program, so we want to have a big voice in this because we're going to be responsible for actually carrying it out," Nebraska Gov. Pete Ricketts told Fox News last week after meeting with President Trump. "We know best what will work in our states, let us do it. Frankly, what will work in Nebraska may not work in New Jersey."

The proposal unveiled Monday included one major Medicaid policy change intended to give states more flexibility and better control over health care costs.

Under the House GOP proposal, states will get a per capita allotment of federal Medicaid dollars—a pre-set amount of money per person, multiplied by the number of enrollees in the system each year (perhaps with bonuses for more expensive groups like the elderly or people with disabilities). The amount of money would rise and fall with the state-level enrollment figures, but states would be left to decide how best to spend the overall pot of federal cash.

This functions more-or-less like a so-called "block grant," which has been a staple of Republican Medicaid reform plans for years, but with a little twist.

Because some states chose to expand Medicaid under the ACA and some didn't, this per capita approach doesn't specifically reward or punish either option. States with larger Medicaid populations—like those that accepted expansion—will get a larger share of federal cash, but everyone will get the same amount on a per capita basis. There's also a provision to make a one-time payment of $2 billion to states that did not expand Medicaid, meant to smooth out non-expansion states' worry that they would be shortchanged by future funding formulas.

In either case, this represents a major shift in the way the Medicaid is funded by the federal government to the states—exactly the kind of fundamental change that many governors were asking for behind closed doors.

"We should give our state governors the resources and flexibly that they need to make sure that no one is left out," said Sean Spicer, the White House spokesman, on Tuesday. Spicer characterized the House GOP bill as the first step in what would eventually be a three-step process to repeal and replace Obamacare.

Medicaid is a massive portion of most state budgets. On average, it accounts for 25 percent of all state spending, and about 19 percent of state spending when federal dollars are taken out of the picture. It gets more complicated when you drill down into how that spending is divided between states and the federal government. In Fiscal Year 2015, for example, the federal government covered nearly 80 percent of all Medicaid costs in Kentucky, but only a little over 50 percent of all Medicaid costs in Virginia.

Many states are struggling to keep up with growing Medicaid costs as America's population grows older. The Affordable Care Act added to those costs by extending Medicaid coverage—in the 31 states that chose to do so—to able-bodied adults without children who earned up to 133 percent of federal poverty wages (about $11,000 for a single, childless adult). Even though the federal government promised to pick up 90 percent of the cost for those new enrollees, governors who met with Trump in late February said they were worried about the long-term fiscal impact on their budgets.

"We've got to find some sort of system to really transition away from what we've done with the expansion because that's too costly, it's too expensive and get to a point where we've got something that can manage our cost better," Ricketts said last week.

The inclusion of the per capita Medicaid caps wasn't enough to stave off criticism of the House GOP Obamacare repeal plan. Conservative and libertarian think tanks and several key Republican members of Congress said Tuesday they opposed the bill.

The policy shortcomings (detailed here by Reason's Peter Suderman) and political challenges facing the House GOP bill may be too much for it to overcome, but the idea of pushing more Medicaid decision-making to the state level is likely to be part of any future federal health care reform effort, as long as Republicans are running the show.

"I would have liked to have seen more flexibility being given to the states," said Arkansas Gov. Asa Hutchinson, according to the AP. "I'm going to continue to look at that."

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  1. God bless Rand Paul’s dogmatic fixation on social Darwinism. It’s easy to forget, spending much of the last year watching in horror as liberals put “principle” (social signalling self-regard) above achieving positive goals, how completely allergic Republicans are to compromise. They’ll never get anything passed because they have like five varieties of stupid competing with each other.

    1. They are not called the stupid party for nothing. That and they always act like they are losers even though they control everything.

      What did the dems do when they controlled everything? Ram through Obamacare. Now the Repubs own everything they act like they need to compromise. What horseshit

    2. Im struggling can you help me out with money tony?

      I dont want to fall victim to social darwinism

      1. Tony knows that he is like all progressives: Cheap, parsimonious, and stingy with his own money whereas he is the very quintessence of altruism with other people’s money.

        1. Grandstanding about how noble they are for advocating forcing other people to pay for something is essentially all they’ve got.

          It’s their entire playbook.

          1. When do I grandstand? You’re grandstanding and you’re lying. You want me to pay for your precious property rights. You want me to pay for a government that does little else but shoot and imprison people and you want me to agree with you that this is the epitome of a moral system.

            1. When do I grandstand?

              Pretty much constantly. It’s just about all you do. You’re doing it right now, in fact. I think it’s a big part of the reason why you come here.

              You want me to pay for your precious property rights.

              [citation needed]

              You want me to pay for a government that does little else but shoot and imprison people criminals and aggressors and that doesn’t force you to buy things you don’t need and you want me to agree with you that this is the epitome of a moral system.

              FIFY

              1. You need me to pay for jackbooted thugs to get undesirables off your lawn, but I don’t need healthcare or clean water?

                1. I’ll make a deal with you. I’ll keep the jackbooted thugs off my lawn, and you pay for your own water and health care.

                  Sound fair?

    3. I also find it amusing when people try to pretend that social sciences are real sciences.

      1. It could be if we had enough data and people were non-bias but the problem is lack of data and every fuck wants to prove an agenda.

    4. I can’t even understand what you’re saying. When exactly did the Democrats compromise when they passed the ACA with a party-line vote without a single Republican voting in favor of it? Is compromise really a one way street with you?

      The Republicans are being stupid though. They should do the one thing they can all agree on, that being repeal, and then have a conversation about what to pass to replace it.

      Of course, I believe that this is the best path forward because I know there is no political will to pass anything like the ACA ever again considering it has mostly exploded in the Democrats faces. That doesn’t seem to be deterring the Republicans from taking complete ownership of what can only be a party-destroying time bomb. They really are the party of stupid which is about where my agreement with you ends.

      1. Democrats found a way to compromise among themselves, including far lefties all the way through the spectrum to Ben Nelson. Republicans chose to be the party of “fuck off and die,” but that’s their problem. My point is that the Republicans have completely forgotten how to govern. Some of the goobers in Congress have never had to do so before. How do the ones who don’t want to strip benefits from their constituents going to reconcile with those who think public service means imposing the insane rantings of Ayn Rand on people?

        1. liberals put “principle” (social signalling self-regard) above achieving positive goals, how completely allergic Republicans are to compromise.

          Democrats found a way to compromise among themselves

          Compromising among themselves =/= compromising as some sort of comparison to Republicans’ alleged refusal to compromise with Democrats.

          To describe “far lefties” “compromising” with someone like Ben Nelson to force poor people to spend money they don’t have on something they don’t need as “putting principle above” anything at all is just bizarre.

          1. I never entertained the notion that the parties would compromise with each other. Republicans long ago decided that winning politics was making Democrats out to be the devil, so they simply can’t. I was referring to intraparty compromise, which Republicans won’t be able to do on healthcare and probably much else.

            1. Republicans long ago decided that winning politics was making Democrats out to be the devil, so they simply can’t.

              Gosh – now that you mention it, the Democrats don’t behave that way at all. I suppose you really do have a point!

              I was referring to intraparty compromise, which Republicans won’t be able to do on healthcare and probably much else.

              You started out by singing the praises of the Democrats for putting principle above pragmatism. Which is it?

        2. Tony = fuck off and die.

  2. My Uncle Nolan recently got Infiniti G Sedan by working part-time from a macbook… go to
    the website…………. https://tinyurl.com/5days-job

  3. You have a right to be free but there is no right to freeload.

  4. “governors who met with Trump in late February said they were worried about the long-term fiscal impact on their budgets.” — So raise the State TAX and LOWER the federal tax. That’s how transfer of power should work.

    Nebraska Gov. Pete Ricketts told Fox News last week after meeting with President Trump. “We know best what will work in our states, let us do it. Frankly, what will work in Nebraska may not work in New Jersey.” — Right; so stop asking New Jersey to fund Nebraska or the other way around. That’s not how it should be either.

    Put a post implementation date on the bill and give the states time to raise taxes while lowering federal tax. What’s the hold up???

  5. Why is this so hard! I know, unless my name is on it, it goes nowhere. The mystery of obozo care has been known even before peelossiii spoke those famous words. Notice to the dc dunderheads, start breathing real air because the vote in 2018 may just remove from the country club on the hill. Dribble and babble are out, substance and clarity are in now and forever.

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