Accelify Blog

Medicaid Proposal Drawing Co ncerns

March 30, 2011

WASHINGTON – White House officials said Wednesday they have major concerns about turning Medicaid into a block grant program, a proposal promoted by Mississippi Gov. Haley Barbour and other Republican governors.

"What we can’t do is kick the most vulnerable out of these programs,” said Stephanie Cutter, a senior adviser to President Barack Obama.

Under the current system, federal Medicaid money is distributed to states according to a formula that differs for each state, and the money comes with a number of restrictions. A block-grant approach would give states a fixed amount, and states would have more say in deciding how to spend it on health care for the poor.

Cutter said block grants could tempt states to choose between providing health care for children – "the cheapest to cover, and in some cases the most important, because of the long-term benefits" – and extremely ill adults. And she said the grants would remain the same whatever the state of the economy.

"They’re going to come under fiscal pressures,” she said of states. "That’s a fixed amount of money. What if the economy goes sour and we need to give them more?”

Nancy-Ann DeParle, the White House adviser on health care reform, said block grants also could pit children’s advocates against the more powerful nursing home lobby.

"Who is going to show up in Jackson to say we need to be covered?” she said. "Are the children going to get there, or is there going to be the nursing home lobby saying, ‘Spend the money on us.”’

Republican governors say they need more flexibility in de ciding how to spend federal Medicaid money. They say Medicaid costs continue to climb under the current system, eroding state budgets. And they say the health care reform overhaul enacted last year will make the problem worse.

Barbour and other governors discussed the block-grant proposal with President Barack Obama earlier this week. Barbour also testified at a hearing Tuesday before the House Energy and Commerce Committee, where he said the health care law could hurt financially troubled states.

White House officials said they welcome the chance to work with a bipartisan group of governors, including Barbour.

"There are things we’re doing together that are going to save Mississippi and other states … a lot of money,” DeParle said. "We want to work with Gov. Barbour on what he thinks are the specific special needs of Mississippi.”

Barbour said he’s disappointed governors weren’t invited early on to be part of health care reform discussions.

"They had this big health care summit at the White House, (but) they didn’t invite any governors – people who are actually on the ground dealing with the issues,” he said. "They weren’t interested in what the governors had to say. And there was a lot of bipartisan agreement about things that would help.”

Earlier Wednesday, Barbour, who is considering a run for president, told a group at the U.S. Chamber of Commerce that the administration isn’t focusing enough on creating jobs.

He noted Mississippi has worked to attract more businesses, including Toyota, partly by focusing on work force training and not imposing more regulations on companies that might want to locate in the state.
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"We as a country have got to return to where our national policy’s first priority is economic growth and job creation,” Barbour said, adding the effort would reduce national spending. "The federal government is sucking money out of the private economy … Bigger government means a smaller economy.”