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Obama offers states more flexibility in health-care law

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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)

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The immediate reaction - among the governors and on Capitol Hill - was mixed.

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The governors said Obama's willingness to release them earlier from some of the law's requirements was welcome. But most stopped short of embracing the idea fully, with Republicans sounding especially wary.

"A number of our fellow governors would be very interested in supporting this," said Washington Gov. Chris Gregoire (D), the NGA's chairman. "We need to talk to them to see if we can put our support behind that bill as the National Governors Association."

Kansas Gov. Sam Brownback, who opposed the health-care legislation as a member of the Senate, said Obama's proposal doesn't negate what he and other Republicans consider a fatally flawed law that they will continue to challenge in the courts. "This offers a little bit of flexibility, which I think is a positive thing," he said, "but it doesn't change the overall objection to the bill."

Other Republicans were equally cautious. Sen. Orrin G. Hatch (Utah) called Obama's new timetable a "gimmick" that would not provide genuine relief.

Governors' more immediate focus was on the potentially crushing burden of rising Medicaid costs. Gregoire said the NGA would accept the president's challenge to develop a bipartisan set of recommendations that would give states more flexibility to curb Medicaid spending. But Republicans, some of whom favor converting the health insurance system for the poor from an entitlement program to a block grant, remained skeptical that Obama will authorize real changes. New Jersey Gov. Chris Christie said that on the question of Medicaid flexibility, the president "said some very nice things and he says them really nicely." But, he added, "I didn't hear any real substance" that would suggest the governors will get what they want.

The proposal to give states greater freedom from the health-care law would not specifically allow governors to deviate from Medicaid's rules for who must be covered and what medical services they must be able to receive. The proposal would, however, let states send HHS officials a combined request to alter Medicaid and their approach to health-care reform.

On Capitol Hill, a spokesman for Senate Majority Leader Harry M. Reid (D-Nev.) said: "The date was set at 2017 because that was the earliest experts thought these measures could be implemented, but we are open to hearing the administration's reasons for concluding that they can be implemented earlier."

Mike Leavitt, a former Utah governor, called Obama's announcement "sort of a hollow victory." Leavitt, who was a major proponent of state experimentation with health care when he led the Department of Health and Human Services under President George W. Bush, said that Obama was essentially telling states, " 'We'll give you permission to ask for permission sooner rather than later.' What Republicans are saying is that we don't want to have to ask for permission at all, because we can't afford to build the system that you've laid out for us."

An aide to Wyden, a liberal who also has long favored giving states more freedom to devise their own health-care approaches, said that officials from the White House and HHS have been conferring with the senator since shortly after he and Brown introduced the legislation in late November.

"It was a process of persuasion," the aide said. "They've been coming around for a while and just kind of came to fruition recently." So far, the aide added, Oregon, Vermont and Massachusetts - which developed its own health exchange before the federal law was enacted - are the only states that have said they will pursue a waiver.

goldsteina@washpost.com balzd@washpost.com

Staff writers N.C. Aizenman and Perry Bacon Jr. contributed to this report.


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