Republican Governors’ Letter Calls for More Cost-Shifting to States and Local Governments – Say Ahhh! A Children’s Health Policy Blog

In a letter to members of Congress outlining their
guiding principles for how Medicaid should be changed in to order to address
the challenges states are facing in sustaining their programs, Republican
governors echoed earlier calls for block grants and more flexibility in how
they run their programs along with repeal of the health care law.   We thought it made sense to look
closer at what the implications of these requests might be for states.

In terms of block grants, a couple of statements made by
Cindy Mann, director of the Center for Medicaid and State Operations at CMS and
Washington Governor Chris Gregoire sum up why block grants are not a solution
to state budget woes (and to the contrary could exacerbate the situation).

“I remain strongly opposed to any congressional effort to
impose Medicaid as a block grant program in Washington. A growing and aging
state population, economic downturns, natural disasters, new diseases or
epidemics could each result in significant cost increases that the federal
government could conveniently ignore, leaving state taxpayers to foot the
bill–or putting our Medicaid enrollees at risk.”

– Governor Chris Gregoire, letter to the editor, Wall
Street Journal, June 12

 “A block
grant fundamentally, as I see it, takes away one of the key areas of
flexibility that a state has, which is to be able to draw down federal dollars
when its costs increase–whether its costs increase because of a downturn and
there’s more people enrolling in the program or whether its costs increase
because there’s some new technology, some new costs of … providing services to

-Cindy Mann, comments to the Medicaid Congress, June 13

Block grants give the states the flexibility to do what
they please, but then leave them holding the bill when needs increase due to an
economic downturn, natural disaster or higher than anticipated health care costs.  If Medicaid had been operating as a block grant program during the current
economic downturn, millions of children and others across the country may have
not been able to get the health care they need because Medicaid programs could
have been closed or benefits denied.

The Republican Governors stuck to their talking points
and characterized the concept of block grants as a call for
more flexibility when in reality it would limit their flexibility to respond to
fluctuating needs. While they state that states are unable to uphold their end of the bargain with the stability protections (MoE provisions), it important to note that more than half of the
states have now ended their legislative sessions without this repeal and have
found a way to balance their budgets in other ways – by using rainy day funds,
closing tax loopholes or by taking a hard look at the 5 percent of folks that
account for 54 percent of all Medicaid expenditures and finding ways to bring
those costs down.

Once gain, the impact of such a change couldn’t have been
better said than in a letter from the National Association of Counties to
leaders in Congress which makes clear this repeal is not cost cutting but cost
shifting.  It fails to address the
cost drivers in health care and passes the buck to local communities, health
care providers and families who are least able to afford it.

H.R. 1683 does nothing to improve the health status of these newly uninsured, we
can expect that many of them will continue to seek care in our county
hospitals, clinics and nursing homes and apply for other county funded and
administered assistance programs. Without the support of Medicaid, counties
will either have to turn them away or raise local property taxes. We believe
this “flexibility” would damage our already fragile local health care safety
net systems.”

– Letter from Larry Naake, Executive Director, National
Association of Counties, June 13

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