Stateline Story

Governors Unite Behind Medicaid Reforms

Iowa - The nation's governors presented a staunchly bipartisan front here over the weekend, repeatedly painting a sharp contrast between their collaborative efforts and what Arkansas Gov. Mike Huckabee (R) termed the "polarized and paralyzed" federal government in Washington.

Nowhere was this mantra more common than on the issue of Medicaid. The governors hope that by staying on message they can lend legs to a proposal before Congress to dramatically overhaul the state-federal program that funds health care for 53 million poor and disabled Americans. Without reform, governors say the program -- which recently eclipsed elementary and secondary education as the largest single portion of state budgets -- will collapse under its own weight.

On Sunday (July 17), the roughly 30 governors who traveled to Iowa for the National Governors Association's annual meeting urged a key member of Congress -- Senate Finance Committee Chairman Charles Grassley (R-Iowa) -- to adopt a package of reform proposals governors unveiled in June that include giving states more flexibility to choose which benefits to offer and allowing states to charge higher co-payments for services such as emergency room visits.

"Governors are very concerned and committed to work on how we can reform the Medicaid system to both deliver these essential medical services to our citizens but at the same time not bankrupt state budgets. The proposal that has been presented a couple of weeks ago in Congress is pretty unique because 50 governors signed on to the seven or eight ideas, and that's not an easy step in the process. We're hopeful that, at a minimum, Congress will see this as a great place to start the discussion," said Kansas Gov. Kathleen Sebelius (D).

Grassley told Stateline.org that he planned to work with governors and that their bipartisan approach has helped ease polarization and create a sense of bipartisanship in Congress on the issue of Medicaid reform.

"We wouldn't get a bipartisan approach in Congress without having a bipartisan group of governors," Grassley said.

Governors emphasized that Medicaid reform should be driven by policy rather than by the federal government's bottom line. Congress' budget blueprint would cut $10 billion from the program over five years.

Grassley said he and other members of the finance committee are committed to examining Medicaid through a policy rather than a budgetary lens, but he also posited that the governors' proposals would help achieve cost savings. "We think it helps us get a long way towards the $10 billion we're trying to save," he said.

Virginia Gov. Mark Warner (D), who has chaired the NGA for the past year, said he was pleased with Grassley's reaction to the governors' proposals. Warner, who now hands the NGA chairmanship to Huckabee of Arkansas, said the next step will be for governors to sit down with members of Congress to nail down details of their reforms.

Matt Salo, who handles health care issues for the NGA, said he is confident that other issues, such as the confirmation of a replacement for Justice Sandra Day O'Connor on the U.S. Supreme Court, will not derail governors' efforts to have their reforms adopted by Congress this year.

"There are going to be a lot of distractions; judges are one of them. But Congress has to pass a budget," he said.

On Medicaid and other issues, governors cast themselves as pragmatists busy doing the people's work in their states while ideologues in Washington remain mired in philosophical debates over the issues of the day.

"Congress is going to approach everything philosophically. ... We need to live with that situation and play the hand that has been dealt us," Huckabee said.

Governors also urged Grassley to pass legislation that would hold states harmless for the costs of financing the new Medicare prescription drug benefit for seniors, which begins next year, Warner said.

High school reform, the strain the war in Iraq has placed on the National Guard, and concerns about recently passed federal standard for driver's licenses were other major topics of discussion among governors.

On Sunday, governors announced that states for the first time have adopted uniform standards for calculating and reporting high school graduation rates. Forty-five governors and 12 national organizations signed on to the compact, which Warner described as the crowning achievement of his yearlong focus on high school reform. Warner said the collaboration could spur insight into dropout rates and causes. States have been faulted for claiming an average graduation rate of 83 percent, far higher than independent measures that estimate that less than 70 percent of public high school students nationwide graduate in four years.

During his year as NGA chairman, Huckabee plans to explore ways that government, employers and the health-care industry can encourage citizens to adopt healthier lifestyles. Huckabee, 49, recently embraced a health regimen that he credits with helping him lose more than 100 pounds. He has written a book titled "Quit Digging Your Grave With a Knife and Fork," chronicling his weight-loss efforts.

Governors were slated to meet privately with U.S. Department of Homeland Security Secretary Michael Chertoff. Warner said he expects governors to voice concerns about the "REAL ID" Act, which for the first time sets federal standards for driver's licenses and aims to prevent states from providing driver's licenses to illegal immigrants. The measure effectively requires state motor vehicles officials to act as immigration officers, Warner said.

Governors also were to meet with Lt. Gen. H. Stephen Blum, head of the National Guard bureau, and with an official from the U.S. Department of Veterans Affairs. Governors were expected to urge beefed-up federal benefits for Guard members and to voice concerns about the impact on their states of lengthy and frequent troop deployments. Such concerns were the focus of a July 6 speech by Warner at the National Press Club in Washington, D.C.

The location of this year's NGA meeting in the state whose caucuses serve as the opening bell of the presidential selection process also spurred speculation about which governors might be using the meeting as a chance to test the political waters for 2008 in the Hawkeye State.

More than half a dozen governors, including Warner and Huckabee, are considering or have been mentioned as possible presidential contenders.

On July 15, governors met with Iowa party activists at private events hosted by the state's political parties. Sebelius, Warner, and Iowa Gov. Thomas Vilsack attended a fund-raising luncheon organized by the Iowa Democratic Party. Huckabee, Massachusetts Gov. Mitt Romney and New York Gov. George Pataki spoke at an event organized by the Iowa Republican Party and the Republican Governors Association.