March 1, 2011
Governors Seek Help on Medicaid Costs
By ROBERT PEAR

WASHINGTON — Governors told Congress on Tuesday that President Obama had not gone far enough in proposing to let states opt out of major provisions of the new health care law in 2014, and they said they needed more immediate relief from the growing financial burden of Medicaid.

“It sounds good, but it provides very, very little actual help,” Gov. Haley Barbour of Mississippi, a Republican, said of Mr. Obama’s proposal.

The most important provisions of the federal law, including a big expansion of Medicaid eligibility and a requirement that most Americans carry health insurance, take effect in 2014. The federal government will initially pay the entire cost of coverage for the people who are newly eligible for Medicaid, but after several years, states will be required to pay some of the cost.

Gov. Gary R. Herbert of Utah, a Republican, said Medicaid had been a large and growing part of his state’s budget even before the federal law was passed.

“In this recession,” Mr. Herbert said, “Medicaid enrollment has skyrocketed. In December 2007, enrollment in Utah stood at 158,267 individuals. In December 2010, enrollment stood at 230,812 individuals, a 46 percent increase in three years.”

The governors testified at a hearing of the House Energy and Commerce Committee.

Gov. Deval Patrick of Massachusetts, a Democrat, told the committee that he was largely indifferent to the president’s proposal because his state had already overhauled its health care system so that 98 percent of residents had health insurance.

The Republican governors said they were skeptical of the president’s proposal because they would have to seek waivers, making the future of innovative state health programs subject to the discretion of the secretary of health and human services. In the past, they said, they have had difficulty obtaining permission for such initiatives.

Mr. Herbert said Utah had been trying for eight months to get federal permission to communicate with Medicaid recipients by e-mail and through a secure Web site. Only after he raised the issue with Mr. Obama at the White House on Monday did federal officials agree to the arrangement, Mr. Herbert said.

Utah estimates that the move will save more than $6 million a year. Federal officials said that Medicaid recipients had low incomes and that some might not have access to computers. So in a letter approving Utah’s request, the Obama administration said the state could use e-mail only if beneficiaries “elect to receive notices through an electronic mailing system.”

Medicaid is now an open-ended entitlement, under which anyone who meets eligibility requirements is entitled to benefits. Governors said they would accept a fixed amount of federal money, in the form of a block grant, if they had more freedom to tailor the program to their residents’ needs.

The new health care law generally prevents states from adopting more restrictive eligibility requirements for Medicaid — for example, by lowering personal income limits. The Republican Governors Association has asked Mr. Obama to lift that constraint.

Representative Joe Pitts, Republican of Pennsylvania and chairman of the Subcommittee on Health, said Congress might need to give states more latitude. “If states cannot change their eligibility criteria,” Mr. Pitts said, “governors are left with few choices but to cut payments to providers or cut other parts of the state budget, such as education and transportation.”

But Representative Gene Green, Democrat of Texas, said, “States want the federal government to write them a blank check.”

Based on his 20 years of experience as a state legislator, Mr. Green said, that is not a good idea. In the absence of federal requirements, he said, Texas might try to balance its budget by eliminating coverage for tens of thousands of children.

Mr. Barbour said: “We can save money without taking people off the rolls. In return for total flexibility in managing my Medicaid program, I would agree to a block grant, with growth capped at half the national rate of increase. We should not have to kowtow to Washington to get permission for every change.”

Jocelyn A. Guyer, co-executive director of the Center for Children and Families at Georgetown University, said the federal law also prohibited states from adopting enrollment procedures that made it more difficult for people to sign up for Medicaid.

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