- The Washington Times - Thursday, February 7, 2013

Republican governors are warming to the expansion of Medicaid under President Obama’s health care law, but their cooperation comes with a common plea to the administration — keep your promises and give us a little flexibility in our backyards, or else the deal is off.

Right-leaning state leaders are wary of expanding the program as envisioned by the Patient Protection and Affordable Care Act, citing its hefty price tag in future years, the entitlement program’s uneven track record and fears an expansion will offer the federal government an entry point into their affairs. Even so, governors are finding it hard to resist a health-care boost that will be funded fully by the federal government for three years, starting in 2014, before that contribution is scaled back to 90 percent by 2020.

The Supreme Court said states can choose whether to expand Medicaid within their borders. As they proceed, Republican state leaders are calling on the Obama administration for leeway in how they carry out the mandates in his signature reforms, or at least setting up automatic defenses if the federal government reneges on its contributions. Meanwhile, some governors are not convinced the expansion would work for them, citing its rigid parameters.

“Each state has its own unique needs. We have different budgets and revenue streams,” Oklahoma Gov. Mary Fallin said Wednesday in a phone interview, one day after she told lawmakers she would push an “Oklahoma Plan” based on existing insurance programs, healthy living and smoking restrictions instead of relying on federal dollars.

Michigan Gov. Rick Snyder on Wednesday became the sixth Republican governor to support an expansion of Medicaid, following in the footsteps of notable “Obamacare” critics, such as Arizona Gov. Jan Brewer and Ohio Gov. John Kasich, who unveiled his decision on Monday. Republican governors in Nevada, New Mexico and North Dakota also have opted to expand Medicaid enrollment in accordance with Mr. Obama’s signature first-term legislation.

In contrast, Pennsylvania Gov. Tom Corbett stood firm in his opposition to the law by opting this week not to support the expansion of Medicaid in the Keystone State.

“Washington needs to stop treating Medicaid as a one-size-fits-all mandate and start granting states true flexibility to successfully reform and build a system that works for them,” Mr. Corbett said in a letter to Health and Human Services Secretary Kathleen Sebelius.

Specifically, Mr. Corbett wants the Obama administration to align benefits with individuals’ needs and incentivize firms to keep employees on their health plans instead of ceding them to Medicaid coverage, the governor’s spokeswoman, Christine Cronkright said.

While the high court made the expansion optional, the administration in December said states that adhere to the health care law’s vision must extend benefits to those with incomes of up to 133 percent of the poverty level. The administration also noted that states can start or stop the expansion whenever they want, and that it would provide states flexibility in how payments are structured.

When Arizona officials recently tried to get an “enhanced match” of 85 percent from the federal government for enrollees who were removed from Medicaid in the past, but needed to get back on, the administration said it was 133 percent or bust, Ms. Brewer’s spokesman, Matthew Benson, said.

“Even if they could allow partial compliance, it is not clear to me that the administration would want to,” said I. Glenn Cohen, a health-policy specialist at Harvard Law School, of the administration’s steadfast approach. “Medicaid is a very cost-effective way of getting eligible individuals covered, as opposed to other methods [of] doing so.”

Jonathan Gruber, an MIT professor and key architect of health reforms in Massachusetts and for the Obama administration, said areas such as co-pays or provider networks could be fit for negotiation, but the 133 percent of the federal poverty level is not flexible.

“The administration thought long and hard about this decision,” he said.

Some governors are taking matters into their own hands. Ms. Brewer unveiled a plan this year for Medicaid expansion in Arizona with a built-in “circuit breaker” that would scale back its enrollment if the federal match dropped below 80 percent in future years. As state lawmakers mull the expansion, it is still unclear whether existing enrollees would be kicked off Medicaid if the circuit breaker went into effect, Mr. Benson said.

In Michigan, Mr. Snyder’s office said their proposal contains safeguards “to protect against changes in Washington’s commitment.” Under the plan, 50 percent of any savings that result from the expansion would be placed in a savings account through 2020, so it has funds to pay for its 10 percent contribution when the feds scale back theirs to 90 percent.

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