Medicaid “On the Road to a Meltdown”: Just Ask the Former Governors in Obama’s Cabinet and the Senate

March 30, 2011

States Need More Flexibility and Freedom from Regulations and Unfunded Mandates


Several former Democrat governors currently serving in President Obama’s Cabinet and in the Senate agree that Medicaid is “on the road to a meltdown.” A review of their past comments reveals that they believe that Medicaid spending is out of control, that unfunded federal mandates and regulations are an unnecessary burden on states, that states need more flexibility and that a solution to these problems is to convert Medicaid to a block grant program:


Medicaid spending is out of control:


FORMER KANSAS GOVERNOR AND CURRENT HHS SECRETARY KATHLEEN SEBELIUS: “ ‘Every governor in the country is trying to grapple with this rapidly growing part of the budget,’ Sebelius said.” (David Klepper, “Medicaid spending under scrutiny; Kansas officials look for savings,” The Kansas City Star, 7/24/2005)


FORMER VIRGINIA GOVERNOR AND CURRENT SENATOR MARK WARNER:“Gov. Mark Warner of Virginia, a Democrat, said earlier this year that Medicaidwas ‘on the road to a meltdown’ and would ‘bankrupt all the states’ if Congress did not intervene.” (Robert Pear, “House and Senate Are Still Far Apart on Medicaid Changes,” The New York Times, 12/12/2005)


FORMER WEST VIRGINIA GOVERNOR AND CURRENT SENATOR JOE MANCHIN:“With about one-fourth of its 1.8 million people relying on Medicaid for their health care, West Virginia spent $2.3 billion in state and matching federal funds on the program in 2005.


“‘I just know that there’s always never enough,’ Manchin said. ‘We want desperately to get this program under control.’” (Lawrence Messina, “Redesign of Medicaid Rewards Healthy Choices,” Charleston Daily Mail, 5/04/2006)


Unfunded mandates and federal regulations burden states:


SEBELIUS: “She added: ‘Basically, there is a war between the centers for Medicaid services and states around the country. Practices, policies, procedures that have been long recognized, long in place, never questioned, are coming under question on all fronts.’” (John Hanna, “Sebelius Says Medicaid Disputes Could Cost State Millions,” Associated Press, 8/10/2004)


FORMER IOWA GOVERNOR AND CURRENT AGRICULTURE SECRETARY TOM VILSACK: “‘They just put mandates on us and ought to pay for those mandates, or relieve us of them,’ Vilsack said.” (Jake Thompson, “Governors Offered More Flexibility, Not More Money,” Omaha World Herald, 2/25/2003)


MORE VILSACK:“‘We’re just asking the federal government to live up to federal mandates,’ said Gov. Thomas Vilsack (D-Iowa).” (Tony Fong, “Medicaid Melee,” Modern Healthcare, 3/03/2003)


FORMER ARIZONA GOVERNOR AND CURRENT HOMELAND SECURITY SECRETARY JANET NAPOLITANO: “When I’m having to cut the budget for Child Protective Services in order to fund Medicaid because they haven’t fully funded Medicaid, and then somehow in all of this, I’ve got to find a way to buy new voting machines, that’s not a partnership,” she said. “And we need to reform the partnership.” (Christina Leonard, “Unfunded Mandates Assailed,” The Arizona Republic, 12/07/2002)


MORE NAPOLITANO: We need the federal government to engage on Medicaid. … They need to support the states. The second thing is we need to do some things internally with cost controls, which we are doing. We may need some help from the providers.” (Dan Nowicki, “An Evening with the Governor,” The Arizona Republic, 11/18/2004)


MANCHIN: “‘We have so many mandates and conditions,’ Manchin said. ‘Just a little bit of flexibility might get you a long way down the road without having to spend a lot more.’” (George Hohmann, “Manchin Says Obama Here to Help,” Charleston Daily Mail, 12/03/2008)


States need more flexibility to manage their Medicaid programs in order to save their budgets:


FORMER WASHINGTON GOVERNOR AND CURRENT COMMERCE SECRETARY GARY LOCKE: “The state wants the right to ration health care – and make some poor patients pitch in with costs – under a groundbreaking proposal for Medicaid reform.


“Long a pioneer in expanding health care access to the poor, Washington now wants to set a trend in the other direction. Gov. Gary Locke is asking the Bush administration to allow unprecedented local control over the federally subsidized Medicaid program.” …


“‘The states look at this as kind of a states’ rights issue,’ said Ree Sailors, health policy adviser to Locke.” (Angela Galloway, “State Seeks Greater Control Over Medicaid,”Seattle Post-Intelligencer, 11/30/2001)


FORMER NEW HAMPSHIRE GOVERNOR AND CURRENT SENATOR JEANNE SHAHEEN: “ ‘We’re finding creative ways of dealing with issues, and Congress doesn’t seem to do that,’ said Governor Jeanne Shaheen of New Hampshire, a Democrat sworn in just three weeks ago. …


“On Medicaid, for instance, the governors unanimously opposed any cap on federal spending, and requested more flexibility to design their own programs.” (Michael Grunwald, “They’re in the Drivers’ Seats; Governors Say They’re Doing Everything Almost Right, But Some Perspectives Converge at the Border,” Boston Globe, 2/9/1997)


Medicaid should be converted to a block grant program to states:


VILSACK: “‘Supporters say it would let states save money by creatively remaking their programs. And they argue that giving them the power to trim services will prevent states from cutting them altogether.’” …


“‘Medicaid reform must incorporate the philosophy of maximizing state choices,’ says the draft now circulating among the 10-member [National Governors Association] NGA Medicaid task force. ‘States should have a number of options to consider in modernizing and improving their Medicaid programs.’” …


“‘The NGA plan was defended by governors of both parties.


“‘Gov. Tom Vilsack, D-Iowa, said states struggling financially will cut services altogether if they don’t have the power to trim them back.


“‘What’s happening now is that states are opting to deal with these double-digit increases (in Medicaid costs) by denying access to health care, and the purpose of this program is to provide access to health care,’ Vilsack said in an interview.” (Laura Meckler, “Governors May Back Bush Medicare Overhaul,” Associated Press, 5/30/2003)


Under Governor Vilsack’s proposal, the federal government would offer each state a fixed annual allotment of federal money for about one-third of its Medicaid recipients.


“Critics described the allotments as block grants. But the amounts could be increased to cover unexpected costs that result from increases in unemployment, natural disasters, outbreaks of disease or the development of expensive new medical technology.” (Robert Pear, “Governors Cite Progress on Medicaid Plan,” The New York Times, 5/31/2003)


FORMER NEBRASKA GOVERNOR AND CURRENT SENATOR BEN NELSON: “Both candidates [Nelson and his opponent] support sending welfare and Medicaid programs to the states to run.” (Editorial Board, “Tax Cuts Treats Mean Trouble for Our Deficit-Chomping Teeth,” Lincoln Journal Star, 7/24/1996)