Snyder: Health care overhaul plan falls short

Melissa Nann Burke, and Jonathan Oosting

Michigan Gov. Rick Snyder is among a group of GOP governors who told congressional leaders Thursday they don’t support the current version of House Republicans’ replacement health care bill, urging them to give states greater authority to revise Medicaid programs they expanded.

“It provides almost no new flexibility for states, does not ensure the resources necessary to make sure no one is left out and shifts significant new costs to states,” wrote the governors, including Snyder, John Kasich of Ohio, Brian Sandoval of Nevada and Asa Hutchinson of Arkansas.

All four lead states that expanded eligibility for the Medicaid health care program for the poor with federal funding under a Democratic health care law signed by former President Barack Obama. The federal government initially fully financed the expansion, but the states are gradually being forced to finance a small share of the expense under current law.

But the House plan cuts federal Medicaid spending and would cost Michigan $530 million to maintain its Medicaid expansion program by late 2019, an amount that would trigger its end under state law, according to a new Senate Fiscal Agency report.

Along with their letter to GOP House Speaker Paul Ryan of Wisconsin and Republican Senate Majority Leader Mitch McConnell of Kentucky, the governors offered a nine-page proposal they say would reform the Medicaid entitlement, while addressing issues of equity for states that expanded Medicaid under the Affordable Care Act, along with states that didn’t.

The governors said they support the goal of repealing and replacing “Obamacare” but want to avoid collateral damage, arguing it is “better to get it right than to go too fast.”

They urged Congress to focus first on stabilizing the private insurance market, “where the greatest disruption from Obamacare has occurred.”

Michigan has enrolled more than 650,000 low-income residents in its unique Medicaid expansion program.

Under state law, the Healthy Michigan insurance plan would end when the state’s investment or spending exceeds the savings it generates. That would happen in fiscal year 2020 that starts Oct. 1, 2019, under the House GOP plan, leaving Michigan to consider new options or reduce coverage numbers.

Snyder has outlined his goals for Medicaid reform in private meetings this year with members of Congress during trips to Washington, D.C. But the plan sent to Ryan and McConnell is the first comprehensive look at what he and other GOP governors have pushed for behind closed doors.

The governors’ plan would give states more options to overhaul Medicaid and change the shift to federal spending limits envisioned by the House.

Their proposal calls for “fundamental reform” to the Medicaid entitlement program but argues that states should be able to select various options for federal funding, including a per-capita cap, block grants or the ability to continue expanded eligibility at reduced match rates for new enrollees.

If funding is ultimately reduced, Kasich, Snyder, Sandoval and Hutchinson say Congress must also change the relationship between the states and federal government.

“A new financing structure that limits federal participation in Medicaid will transfer risk from the federal government to the states, so states must be granted meaningful relief from federal regulatory constraints that exist today in order to effectively manage that risk,” they wrote.

States should have the authority to set their own enrollment limits, benefits, service delivery and payment options without the need for federal waivers, the GOP governors said.

Healthy Michigan, which Snyder has championed as a model for the nation, includes cost-sharing and healthy behavior provisions that required two federal waivers for full implementation.

The state program has attracted about 180,000 more recipients than originally projected. Before Healthy Michigan launched on April 1, 2014, it was predicted that 320,000 people would sign up the first year and 470,000 by 2021. As of Monday, 657,988 residents were enrolled.

The U.S. House proposal would reduce Medicaid funding paid to the states about 25 percent, according to an analysis released Monday by the non-partisan Congressional Budget Office.

Snyder and other GOP governors argue states should be able to implement “enforceable financial participation of enrollees” and design their own benefits packages. States should also have the authority to set provider payment rates and the option to mandatorily enroll all populations in reduced-cost managed care plans, they said.

President Donald Trump, who supports the House Republican health care plan, said in his Feb. 28 joint address to Congress that the federal government should “give our great state governors the resources and flexibility they need with Medicaid to make sure no one is left out.”

U.S Secretary of Health and Human Services Tom Price has also called for a new partnership that would give states the ability to design programs that meet their “diverse” needs of their Medicaid populations.

“We agree and share in these important objectives,” the governors wrote. “Unfortunately, the current version of the House bill does not meet this test.”