Politics & Government

Some in Legislature want more leeway on Medicaid in Obamacare replacement, but not fewer dollars

Vice President Mike Pence, left, watches as President Donald Trump prepares to sign his first executive order Friday in the Oval Office of the White House in Washington.
Vice President Mike Pence, left, watches as President Donald Trump prepares to sign his first executive order Friday in the Oval Office of the White House in Washington. The Associated Press

As congressional Republicans in Washington, D.C., work to repeal the Affordable Care Act, state GOP lawmakers are compiling a wish list for its possible replacement.

High on that list for some: more leeway in how Washington state spends federal dollars it gets through Medicaid, the government health insurance program for mostly low-income people.

The Affordable Care Act, also known as Obamacare, included an expansion of Medicaid that resulted in new health coverage for more than 600,000 Washington residents, according to the Office of Financial Management.

The state is at risk of losing about $2.7 billion per year for that expansion if Obamacare is repealed without a replacement, said Bob Crittenden, who works on health care reform for Democratic Gov. Jay Inslee.

In its present form, Medicaid is an open-ended entitlement — meaning federal money given to states increases or decreases based on changes, such as the number of people enrolled or the cost of their treatment.

But various Republicans at the federal level have proposed giving states block grants, or fixed amounts of money, that states can use for health care programs. The New York Times reported last week that President Donald Trump’s plan to replace Obamacare includes paying for Medicaid with block grants.

Some state lawmakers say they would welcome the flexibility that could come from block grants.

Sen. Ann Rivers, a Republican from La Center who is chairwoman of the Senate’s Health Care Committee, points to the waiver from certain Medicaid requirements that Washington had to negotiate last year to pursue reforms, such as increased preventative care and more “proactive management for conditions like diabetes and mental illness,” a news release from the governor’s office says.

Rivers said the state should have the discretion to use all of its money where patients need help without having to apply for waivers that come with expiration dates and specific requirements. Block grants could give Washington state more freedom to fit its health programs to the unique qualities of the state.

“Washington state may be very, very different from Florida,” she said. “So I don’t think this one-size-fits-all approach is truly helpful or appropriate.”

Inslee, on the other hand, says the waiver is an example of how the current system is working. He said the waiver money can be used in an “extremely flexible manner,” alongside the traditional Medicaid system that doesn’t have a cap on how much money the state gets. The waiver comes with up to $1.5 billion in money to help further the state achieve its goals.

He criticized block grants as an excuse for Republicans to spend less money on health care overall and shift costs to the states.

“You don’t need to have a limit on total spending to give states flexibility,” he said. “Washington state is an exhibit A about this.”

Amy Blondin, a spokeswoman for the state’s Health Care Authority, which administers Medicaid, said a capped funding level makes block grants “more limiting rather than providing flexibility, generally speaking.”

For example, “in an economic downturn when maybe more people need more Medicaid coverage,” she said. “We’re trying to serve an expanded population with the same block grant dollars.”

Rivers acknowledges that block grants would have to come with sufficient federal funding to work for Washington. That’s partly why she wants to see a concrete proposal before fully backing the concept.

Other Republican lawmakers are taking even more of a wait-and-see approach. Senate Majority Leader Mark Schoesler told reporters at a news conference last week that he would weigh in on a replacement to the health care law only when he sees serious proposals released in Congress.

Republican members of Congress reportedly are agonizing over repealing Obamacare and without a consensus on a replacement policy. Several Republican senators in Congress have proposed letting states continue to use Obamacare, but allowing others to opt out.

Schoesler said “it would be very difficult to go backwards,” from the current funding levels of Obamacare’s Medicaid expansion.

But he said more flexibility in how the state administers Medicaid “could certainly be useful.”

Rivers has been working on more specifics, and supports a letter sent in December to the Trump administration outlining bipartisan efforts to reform health care.

The letter was composed by the Reforming States Group, a bipartisan group of health policy leaders from state governments that includes Rivers and Democratic state Reps. Laurie Jinkins of Tacoma and Eileen Cody of Seattle. Cody and Jinkins are key lawmakers for their party on health care issues.

The group asked for a swath of changes, including providing more latitude to states on running Medicaid.

It also asked for an increase in data collection to inform health care policy, more support for state efforts to reform health care payment and delivery, and more support for preventative care and management of chronic illness. It doesn’t specifically address block grants.

Though Jinkins echoed Inslee’s concerns about block grants — namely that they will be a budget cut in disguise — she said flexibility through a block grant “in and of itself isn’t a bad idea.”

“There are definitely some bipartisan concepts we can agree to,” Jinkins said of the Reforming States Group’s request.

Rivers said state control of Medicaid dollars could come in many forms, whether it’s in the form of a block grant, or something else.

“I don’t care what you call it — you could call it ‘your grandmother’s pink nighty,’ ” Rivers said. “As long as it gave us flexibility and enough funding to meet the needs of the patients in our state, I’d love it.”

Walker Orenstein: 360-786-1826, @walkerorenstein

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