Governors Need A Seat At The Medicaid Reform Table

Gov. Gary Herbert Governor of Utah
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As Governor of Utah, I have witnessed how too many of our citizens have been underserved by the one-size-fits-all Affordable Care Act (ACA) and its impact on Medicaid. As Congress considers needed reforms to Medicaid, it is essential they learn from the experiences of the 50 states. Why? Because it is the states that actually run the Medicaid program and it is the states that regulate insurance.  States need Medicaid to be  sustainable, flexible and equitable.

As a governor, there are two basic facts about our healthcare system that keep me up at night: (1) Our insurance marketplace is in crisis and (2) Medicaid continues to consume more and more of our state budget. Consider that on the federal exchanges in Utah this past year, premiums rose 30 percent and 13 of our 29 counties now have only a single option for health insurance coverage.

That is why I am pleased to see how governors from around the country are coalescing around some common sense principles that can help Congress improve our Medicaid program. And this time around, I am hopeful that Congress will take the time to get it right.  Governors and the states didn’t have a seat at the table when the ACA was being crafted, but this time we have been invited to participate.

Here are some principles that can help guide our path forward.

1. The Medicaid program must be sustainable.

In order to make Medicaid sustainable we need to keep providers in the program.  And the current trajectory of Medicaid threatens the funding of other key services, like public education and transportation. We need to reduce the Medicaid growth rate.

In Utah, we’ve implemented an Accountable Care Organization (ACO) service-delivery model. The result has been $45 million in savings over three years. I believe that per-capita allotments and block grant funding mechanisms would help give states greater flexibility and hence the ability to reduce their Medicaid growth rates, while continuing to provide services to their most vulnerable citizens.

2. States must have flexibility in administering their Medicaid programs.

As financial risk shifts from the federal government to state governments under a per-capita or block grant allotment scenario, we need the flexibility to manage that risk. Excessive federal regulation has tied our hands and limited our ability to innovate and find creative solutions that provide better healthcare outcomes for lower cost.

3. States must have the flexibility to cap enrollment, prioritize benefits, impose work requirements and job training, and increase cost sharing.

The Centers for Medicare and Medicaid Services (CMS) waiver process has effectively locked these tools away under a thick layer of burdensome bureaucracy.  Utah once waited and unbelievable three years for CMS to tell us that we were not allowed to increase copays.  Indeed, Utah is still waiting to hear whether the targeted Medicaid expansion the state passed in March of 2016 may  advance in order to start providing coverage to some of our state’s most vulnerable populations.

4. And finally, Medicaid reform must be equitable across all states.

If enhanced federal funding remains an option for states that chose to expand their Medicaid programs under the ACA, non-expansion states should have access to the same levels of funding.  Utah has embarked on a significant justice reform initiative and is working to provide individuals with the corresponding substance abuse treatment.  Other states have used their Medicaid expansion to cover these needs and we do not want to be frozen out of these types of funds.

States must seize the opportunity to be heard on healthcare reform this time around. Governors need to come together and identify common principles and policy proposals for Medicaid and health insurance. As Congress and the administration come to understand and address our concerns as states I believe that we will be able to create a much more efficient and resilient Medicaid program for our vulnerable citizens who depend upon it.