More on State Flexibility

Three interesting points on the ongoing debate over states’ Medicaid budgets and flexibility under the health law:

First, liberal commentators in the past few days have made striking admissions that the President’s proposal for state waivers does NOT give states the flexibility to enact conservative health care solutions.  This morning Jonathan Cohn wrote a column including this line: “[Senator] Hatch…and other critics of Obama’s proposal have a point: It wouldn’t allow them to enact the sorts of health care reforms they would prefer.  Likewise, the Post’s Ezra Klein notes that “conservatives can’t do any better – at least not under these rules.”  Both columnists go on to say this lack of flexibility is a good thing – defending the richer benefit mandates that will raise the price of individual insurance by $2100 per family, according to the Congressional Budget Office.  Cohn also goes on to promote a single-payer health care system as a “more efficient” plan that could receive a waiver – “not the sort of health care alternative conservatives have in mind.”  Mind you, some (certainly not all) conservatives might actually support a state like Vermont that seeks to enact a single-payer alternative – so long as states like Indiana or Utah have the flexibility to enact THEIR alternative without meeting new federal requirements.  But Cohn and Klein both admit that the “flexibility” in the President’s proposal only goes one way – towards more government involvement and regulation.

Second, does anyone remember the debate over the Basic Health plan during the Finance Committee markup in October 2009?  You may recall that Sen. Cantwell offered an amendment to the Finance bill – which later became Section 1331 of the statute – allowing states to receive funding to establish programs similar to Washington state’s Basic Health plan.  Well, a New York Times article this morning reported that “Gov. Christine Gregoire of Washington, a Democrat, recently removed 17,500 adults covered under Basic Health.”  It’s an interesting admission that what Democrats once viewed as a de facto government-run plan hasn’t succeeded in controlling costs – either that, or states need more flexibility in managing their health care programs during times of tight budgets (or both).

Finally, if you haven’t had a chance to read the testimony from yesterday’s governors’ hearing yesterday morning, it’s worth taking a few minutes to do so.  Governors Barbour and Herbert both gave specific examples of how they are attempting to innovate within their Medicaid programs, and how Washington bureaucratic requirements – such as Utah’s eight-month-long expedition to get approval to send e-mails to beneficiaries – frequently get in the way.  (Other coverage of the hearing – and the joint Finance/Energy and Commerce report on states’ $118 billion in Medicaid costs – can be found in articles by the New York Times and Washington Post.)