States Press Senators on Medicaid Expansion Funds

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By Che Odom

State officials and their lobbyists are pressing a group of U.S. senators privately crafting a health care bill to save Medicaid expansion funds under the Affordable Care Act.

Federal health care legislation is the top issue coming out of Washington for state lawmakers and governors, state officials tell Bloomberg BNA.

Gov. John Kasich (R-Ohio) said he is working with “like-minded” senators and governors to preserve coverage for people “dealing with mental illness, addiction and chronic illness.” In a statement to Bloomberg BNA, he said he was hopeful that senators “will find the right way forward.”

“Like-minded” senators include Ohio’s Rob Portman (R), who is part of the group working on a Senate health care bill. The group also includes Sens. John Cornyn (R-Texas), John Thune (R-S.D.), Orrin Hatch (R-Utah), Ted Cruz (R-Texas) and Shelley Moore Capito (R-W.Va.). The group is led by Senate Majority Leader Mitch McConnell (R-Ky.).

A spokesperson for Cruz told Bloomberg BNA his office has received multiple visits from state officials this year about health care and continues to be in contact with officials in Texas, which didn’t expand Medicaid under the Affordable Care Act.

The issue for government leaders back home is, among other things, financial. Medicaid spending is the second largest portion of state budgets, so cuts will be felt.

Also part of the calculus, state budgets are growing more slowly than a decade ago. Thirty-nine states have lower spending, when adjusted for inflation, than they did 10 years ago, and half of the states have had back-to-back years of budget shortfalls, according to John Hicks, executive director of the National Association of State Budget Officers.

Finding Bill

The House voted 217-213 on May 4 to eliminate extra federal funds in 2020 that 31 states and the District of Columbia receive under the Affordable Care Act’s expanded Medicaid program. The House bill would also give states fixed federal sums annually, ending the open-ended payments.

This means an $834 billion cut over the coming decade. States from California to Connecticut have said they would lose billions of dollars in federal funds and be forced to make cuts to Medicaid if the bill becomes law.

The battle is now in the Senate, where McConnell’s group will work on their bill through the summer and state officials are attempting to make their voices heard.

“This is by far the biggest worry of states coming out of Washington,” Max Behlke, the National Conference of State Legislature’s director of budget and tax, told Bloomberg BNA. “We are very active on this issue right now.”

The National Governors Association, which consists of governors who support and oppose Medicaid expansion under the Affordable Care Act, said in a May 5 letter to Congressional leaders after the House vote that it hopes Congress will “work closely with the nation’s governors” to develop a health system that puts “patients first” and addresses “unsustainable health care spending.”

Governors “continue to think through health reform,” the group said in a May 31 email. “In fact, today representatives from 14 states with an even split of Democratic and Republican governors, are meeting outside Washington, D.C., to discuss reform and navigate possible solutions.”

‘Flexibility’ Key

Gov. Charlie Baker (R-Mass.) said in a statement released to Bloomberg BNA that he urges the Senate to maintain spending flexibility within the Medicaid program for states, which is missing under the House bill, because it is crucial to “provide coverage for the needy.”

Baker, along with governors and state officials from across the country, has made multiple trips to Washington this year, meeting members and their staff. Pennsylvania Insurance Commissioner Teresa Miller is among those who’ve dropped in on Congress.

“Our hope is that the Senate will take a more thorough and deliberative approach than the House did in evaluating significant changes to our health care system and the potentially devastating impact of those changes on the people that rely on it every day,” Miller told the U.S. Senate Democratic Policy and Communications Committee May 10.

Senate Squeeze

Senate Republicans in private talks say they’re eyeing one easy move—keeping Obamacare and its tax increases in place until 2020 before moving to a new approach, according to Bloomberg News. Early fissures over the ultimate fate of the taxes were on display late last week as lawmakers prepared for their week-long Memorial Day recess. The tax cuts mostly benefit well-off Americans.

Senate Finance Chairman Orrin Hatch made the case on the Senate floor that GOP lawmakers should be prepared to cut all of them or risk looking foolish after “spending the better part of a decade railing against Obamacare’s burdensome job-killing taxes.”

“We should not be treating the Obamacare taxes as a smorgasbord, picking and choosing which ones to keep and which to discard,” the Utah Republican said. “I don’t think there is a single tax increase in Obamacare that has enjoyed support on this Republican side.”

Senate Republicans participating in health-bill negotiations say their conversations so far have centered on policy changes, not taxes. GOP senators are looking at a slower phase-out of Obamacare’s Medicaid expansion and shoring up insurance exchanges as insurers are leaving parts of states including North Dakota, Missouri and Iowa.

With assistance from Leslie Pappas in Philadelphia

To contact the reporter on this story: Che Odom at COdom@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

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