Capitol Correspondence - 02.27.17

Republican Governors Discuss Views on Medicaid Reform at Meeting in DC

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Last week, governors from across the nation convened in Washington DC to gather for a National Governors Association meeting. Leaked documents coming out of the Republican Governors Association (RGA) show some of the things that Republican governors are talking about regarding Medicaid reform. The overarching themes are that Republican governors are looking for more flexibility in designing their Medicaid programs, and are willing to discuss funding cuts in exchange for less federal oversight. Some specific takeaways from the documents include:
  • Option of block grant or per capita cap: The RGA proposal would give states the option of either a per capita cap or a block grant for Medicaid, and would give states the ability to select different options for different population groups, including potentially leaving certain population groups in traditional Medicaid. (It is unclear whether the Medicaid expansion population group would be one subject to a carve out). 
  • Per capita cap growth rate: The proposal looks at using either the national average trend or a variable rate trend to increase rates over time. Under a variable rate structure, states that currently spend more per enrollee would see slower rate growth than those that spend less. The goal of such a program is to stabilize and impose uniformity on the entire program, to level out spending across states. 
  • Flexibility for duals: The proposal requests additional flexibility for the dually eligible populations (those who are eligible for both Medicaid and Medicare). One possibility is to put cost-sharing responsibility on Medicare in states that place seniors and people with disabilities under a per capita cap system. 
  • Suspension of federal rules: The proposal lists out federal rules that the RGA sees as constituting “federal regulatory overreach”. This includes the recent Medicaid managed care rule, the Medicaid access rule, mental health parity requirements, and the CMS home and community settings rule. The proposal recommends suspending all of these rules until new rulemaking can be undertaken to give states more control over the issues covered by the rules. 
  • Elimination of waiver authorities: The proposal seeks to eliminate the need for any waiver authority, including Section 1115 waivers, for populations under per capita or block grant authority. This would allow states to make changes to their Medicaid programs with less federal oversight by removing the need for CMS to approve all changes that have traditionally been part of a waiver application. 
Governors in town for the conference met with members of the Trump administration, including the President, Vice President Pence, and Health and Human Services Secretary Tom Price. Though many of the ACA repeal decisions will be in the hands of Congress, several Republican governors praised Congress and the Administration for inviting them to engage in conversations about what healthcare and Medicaid reform should look like. It should be noted that the attached documents are suggestions being advanced for discussion, but that are not necessarily reflective of the legislation that Congress will ultimately put forth. 
The Democratic Governors Association (DGA) put out a statement opposing the proposals made by the RGA, including a letter written to Speaker of the House Paul Ryan (R-WI) and other prominent House leaders, urging tjem to oppose block granting or converting Medicaid to a per capita cap system.