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Leaked GOP docs show governors’ health care demands

Ohio Governor John Kasich Speaks To Press After Meeting With President Trump At The White House Photo by Mark Wilson/Getty Images

Republican governors are undecided on how far they want Congress to go in overhauling Medicaid, internal documents obtained by Vox show.

The governors, who gathered in Washington this weekend for the National Governors Association, will be a crucial voice in the debate over repealing and replacing Obamacare. Many participated in the health law’s Medicaid expansion, which has expanded coverage to millions of Americans.

The Republican Governors Public Policy Committee has drafted up its policy demands for Congress — but is still undecided on at least two significant policy questions.

The documents suggest that Republican governors may not be a significant obstacle to their party’s plans to ratchet back Medicaid spending and turn Medicaid into a “block grant” program. In broad strokes, they agree with leading proposals circulating on Capitol Hill.

But governors are still undecided on a crucial question — what ought to happen to all the people who signed up for coverage through Obamacare’s Medicaid expansion — and appear to be planning to make specific demands from Washington in order to support any cuts to this particular part of the program.

The Republican Governors Association did not immediately respond to a request for comment on the documents. The documents are similar in policy proposals to those the Associated Press reported on Friday, although they appear to contain different language describing those policies.

Republican governors like the idea of “block grants” and “per capita caps”

Medicaid, the federal entitlement program that covers low-income Americans, is perennially the largest item in state budgets. Medicaid spending is shared between the federal government and states, with each paying a set percent of each beneficiary's costs. In return for the federal match, states must meet certain requirements for coverage set by the federal government.

The federal/state split varies from state to state, with the feds footing a higher percentage of the bill in states where people earn less. That's why in Mississippi, for example, the federal government pays for 74 percent of each beneficiary’s costs, compared with only 50 percent in Massachusetts.

Medicaid pays this amount regardless of how many people are on the program. It is an open-ended funding commitment to cover a set percent of enrollees’ bills. When the need for Medicaid rises — like during a recession or a particularly bad flu season — the federal government is committed to meeting it.

Republican governors are advocating for a quite different approach: one in which the federal government’s commitment to the program would be fixed, rather than open-ended. This could work, according to their policy documents, in one of two ways:

  • A per capita cap: States would receive a set amount of money for each Medicaid enrollee they sign up. Under this model, the federal commitment to Medicaid is no longer open-ended; states get a set amount for each enrollee, likely less than what they get now but also with fewer strings attached.
  • A block grant: States would receive a lump sum of money to cover Medicaid enrollees in their state. This amount, unlike a per capita cap, would not be tethered to how many people are in the program.

In either case, states want something in return for less money: more flexibility.

“Given that both of the options described above would transfer significant risk to the states, it is imperative that the federal-state partnership around Medicaid is transformed to ensure that states can efficiently and effectively manage their programs,” one policy document argues.

Republican governors are weighing whether they should push for all states converting to one of these options — or whether there should be an opportunity to opt out and stick with the current financing model. Here is the policy question that one document puts to governors:

One key question Republican governors are weighing: what should happen to funding for the Medicaid expansion?

About a dozen states with Republican governors are participating in the health care law’s Medicaid expansion. Repeal of this provision has become especially challenging for Congress, as vocal Republican governors such as Ohio’s John Kasich have spoken out in defense of the health law provision.

But Republican governors are considering whether they could support scaling back Medicaid expansion funding — so long as they got something in return.

Specifically, the Republican Governors Public Policy Committee outlined the idea of supporting significantly less funding for Medicaid expansion so long as they believe those people can find affordable coverage in the private marketplace.

But right now this is not a policy position, but rather a question that these new documents ask governors to consider: “Should states propose reducing the upper limit for the enhanced match ... and if so, what are the conditions that need to be in place before making a change?”

Read the documents