If he allows states to tighten eligibility requirements, it will outrage many of his core supporters while undermining the central goal of his signature health-care law: expanding insurance coverage. But if the president turns his back on governors struggling to gain control of their finances by trimming their most costly program, he risks intense criticism just as his administration is locked in a battle with Republicans over the nation’s soaring debt.
“There is a growing impatience among governors,” said Mike Schrimpf, communications director for the Republican Governors Association. “As the Medicaid portion of state budgets grows, the issue becomes even more pressing.”
This week, 29 GOP governors wrote a letter asking congressional leaders for greater flexibility in spending Medicaid dollars. They say that would give them much-needed control over the soaring cost of Medicaid, often the largest single item in state budgets.
Two Republican governors are going even further. New Jersey Gov. Chris Christie, who has tangled with Democrats and their core supporters by demanding deep concessions from public employee unions, is planning to formally ask the Obama administration to allow his state to dramatically tighten Medicaid eligibility for New Jersey adults.
Meanwhile, the U.S. Department of Health and Human Services is weighing a similar request from Arizona Gov. Jan Brewer.
Across the country, governors are concerned about the burgeoning cost of Medicaid, which in fiscal 2010 consumed nearly 22 percent of state budgets, according the National Association of State Budget Officers. That’s larger than what states spent on K-12 public schools.
Medicaid’s share of states’ budgets ranged from 7.3 percent in Wyoming and 7.5 percent in Texas to 32.8 percent in Illinois and 37.1 percent in North Carolina, according to NASBO.
But while both Democrats and Republicans have sought to save money by encouraging, for example, generic drug prescriptions, home care for the elderly and managed care, GOP governors have also challenged the provision in the health-care reform law enacted last year that generally prevents states from tightening Medicaid eligibility requirements.
“This law will greatly expand state Medicaid programs, pulling tax dollars from other necessary areas like education and law enforcement,” Mississippi Gov. Haley Barbour (R) told congressional lawmakers earlier this year. He added that the health-care reform law “expanded a broken system.”
Like many in the GOP, Barbour would like to see Medicaid converted into a block grant, which would have fewer restrictions and allow states to tailor their programs. But opponents say that change could lead to a decline in the level of health care for the poor.