Hatch, Upton Welcome Governors' Medicaid Reform Report

August 30, 2011

WASHINGTON - Today, the Republican Governors Public Policy Committee (RGPPC) unveiled A New Medicaid: A Flexible, Innovative, and Accountable Future, a new report outlining policy options to increase the efficiency and effectiveness of the beleaguered Medicaid program.  The report responds to requests from U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the U.S. Senate Finance Committee, and Representative Fred Upton (R-Mich.), Chairman of the U.S. House Energy and Commerce Committee, who have been working to reform Medicaid by inviting ideas and input from states on strategies to improve patient care and lower costs.

"Governors know what does and doesn't work with Medicaid in their states.  They are in the best position to help Congress fix this broken entitlement program, and we will do it with their help," said Hatch. "States need more flexibility - not more micromanagement - from Washington.  These smart and innovative recommendations will help us develop a comprehensive Medicaid reform plan that puts states in charge to make the program work better for taxpayers and for patients."

 "Policies handed down from Washington have significant consequences for states and local governments. Rather than imposing new federal mandates, we are building a new partnership with governors to listen to their concerns and solicit their input on how to protect taxpayers and improve essential programs," said Upton. "The concepts included in this report add to the growing collection of views from governors of both parties, which will help inform our efforts to reform Medicaid for the future."

Today Medicaid spending consumes nearly a quarter of state government budgets, often forcing significant cuts to other state priorities, such as education and law enforcement. The enactment of the $2.6 trillion health law, which marked the largest expansion of the entitlement program since its inception more than 45 years ago, has placed increased pressure on state budgets.  Half of Americans obtaining health care coverage under the new law will be covered by Medicaid.

On the federal level, both Hatch and Upton have championed efforts in Washington to overhaul the broken entitlement program, including the State Flexibility Act to repeal the onerous Maintenance of Effort (MOE) requirements that were included in the new health law. They have consistently said the highly successful, bipartisan welfare reform of 1996 - where states led the way to provide the best solutions for a broken program - should be the model to modernize Medicaid. Earlier this year, the lawmakers, whose committees have jurisdiction over the Medicaid program, called upon the nation's governors to provide feedback on the challenges states face and the flexibility they need to make Medicaid work better. As a result, Republican governors submitted a series of principles to Congress in June, and today's report further builds upon those goals.

A New Medicaid: A Flexible, Innovative, and Accountable Future recommended the new health law be fully repealed and replaced with market-based reforms to the American health care system. The report will serve as the foundation for the RGPPC's upcoming Health Care Summit in October.

The report's recommended policy solutions include:
"¢    Principle #1:  States are best able to make decisions about the design of their health care systems based on their respective needs, culture and the values of each state.
"¢    Principle #2:  States should have the opportunity to innovate by using flexible, accountable financing mechanisms that are transparent and hold states accountable for efficiency and quality health care.
"¢    Principle #3:  Medicaid should be focused on quality, value-based purchasing and patient-centered programs that work in concert to improve the health of states' citizens and drive value over volume, quality over quantity, and, at the same time, contain costs. 
"¢    Principle #4:  States must be able to streamline and simplify the eligibility process to ensure coverage for those most in need, and states must be able to enforce reasonable cost sharing for those able to pay.
"¢    Principle #5:  States can provide Medicaid recipients a choice in their health care coverage plans, just as many have in the private market, if they are able to leverage the existing insurance marketplace.
"¢    Principle #6:  Territories must be ensured full integration into the federal health care system so they can provide health care coverage to those in need with the flexibility afforded to the states.
"¢    Principle #7:  States must have greater flexibility in eligibility, financing and service delivery in order to provide long-term services and support that keep pace with the people Medicaid serves.