Obama offers states more flexibility in health-care law

President Barack Obama is offering to let states unhappy with his health care overhaul design their own plans as long as they fulfill the goals of his landmark law. (Feb. 28)
Washington Post Staff Writers
Tuesday, March 1, 2011; 9:33 AM

President Obama sought to defuse criticism of the new health-care overhaul Monday by saying he is willing to give states an earlier opportunity to opt out of certain key requirements - but only if they can find their own ways to accomplish the law's goals.

The announcement was met with skepticism by many Republican governors who said they need to learn more about it.

"The devil's in the details," said Mississippi Gov. Haley Barbour, who is appearing on Capitol Hill Tuesday morning along with Massachusetts Gov. Deval Patrick (D) for a previously scheduled hearing on complying with Medicaid eligibility under the new health-care law.

The 9:45 a.m. hearing before the House Energy and Commerce Committee could provide the first opportunity for lawmakers to elicit feedback on Obama's announcement.

If Congress approves a change along the lines of what Obama offered, states could gain exemption by 2014 rather than 2017 from some central and controversial elements of the law: that most Americans carry health insurance, that many employers offer their workers coverage, and that states create insurance marketplaces to help individuals and small businesses buy health plans that meet federal rules.

To win that freedom, though, Obama reminded the governors at a White House meeting that states would have to prove to federal officials that they could still achieve the law's objectives. Specifically, they would need to demonstrate that insurance benefits would be as affordable and as comprehensive, that the same number of residents would gain coverage, and that the alternate approach would not deepen the federal deficit.

With a majority of states trying to overturn the law in the federal courts and Republican governors complaining that it gives federal regulators too heavy a hand, the president sought to move the debate onto new ground by forcing the law's critics to prove that their vision for the nation's health-care system could work.

"Many of these states contend they can do more with less if they get the flexibility to be more creative," said Drew Altman, president of the Kaiser Family Foundation, a nonpartisan health policy group. "This puts the onus back on them and calls that into question."

In taking this new tack, the White House is endorsing a proposal introduced late last year by a bipartisan trio of senators. The bill, sponsored by Sens. Ron Wyden (D-Ore.), Scott Brown (R-Mass.) and Mary Landrieu (D-La.), would accelerate a provision in the law that would allow states to ask federal health officials for "innovation waivers" starting in 2017 that would free them to devise ways to improve health care. The legislation would move up the date to 2014.

The change in timing is significant, because 2014 is when the provisions in question are to go into effect, so states could - in theory, at least - get permission early enough to avoid the requirements.

"I think that's a reasonable proposal. I support it," Obama told the governors who convened at the White House on Monday as part of the National Governors Association's semi-annual meetings. "It will give you more flexibility more quickly, while still guaranteeing the American people reform. If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does - without increasing the deficit - you can implement that plan. And we'll work with you to do it."

Although the president has endorsed the idea, Congress would still have to approve the change for states to get relief by 2014. If it did, Health and Human Services officials would then need to write rules defining specifically how states could meet criteria for a waiver.

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