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USA Today - Let States Guide Medicaid Reform

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By Governor Tom Corbett

Pick up any newspaper across the country, and you'll likely see a headline about the difficult choices facing states as they struggle to balance their budgets.

Unlike the federal government, states are legally required to have balanced budgets. They cannot run a deficit and accumulate massive debt. While this presents a daunting challenge in many state capitals that is non-existent in Washington, it also has made governors into some of the nation's most innovative thinkers when it comes to efficient governing.

Governors have led the way in reforming our society's safety net because they realize that the success of our human services programs should not be measured by how large the programs are and how many people have come to rely on them.

Tuesday, the House Energy and Commerce Committee will host a hearing to gather input from state leaders on the impact federal health care reform will have on state-run Medicaid programs.
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Governors from around the country will detail their experiences and challenges in trying to operate efficient, fiscally viable Medicaid programs under the burden of federal requirements that often hinder state objectives.
Step in right direction

Hearings like this one are an important step in the right direction, showing an acknowledgement by members of Congress that states can be laboratories for innovation and creative policymaking. States -- not the federal government -- have led the way with policies that include welfare reform to help Americans become more self-sufficient, charter schools to improve education and medical malpractice reform to rein in junk lawsuits and hold down health care costs.

Medicaid is another area where states can drive innovation. Medicaid is bureaucratic and costly, and the stimulus and new federal health care law have made a bad problem even worse, shackling states with unrealistic mandates.

Congress has made the states increasingly dependent on federal dollars and then left them with a Hobson's choice between accepting heavy-handed federal mandates or relinquishing key support for vulnerable populations.

While this federal-state interaction might seem like little more than a policy tug of war to the casual observer, it has significant ramifications on millions of Americans who rely on Medicaid to improve or sustain their quality of life.

When states are denied the flexibility that brings innovation and value to Medicaid, it is the consumers and taxpayers who lose. Policymakers are left with few options beyond cutting benefits to those in need or reducing provider reimbursements. Neither is a preferred option, and both are avoidable.
A model in Pennsylvania

Pennsylvania's Medicaid program, for example, has seen steady, unsustainable increases in the number of people it serves and the cost of those services. The Keystone State's Medicaid budget is growing at nearly 12% a year, while the Commonwealth's general revenues have grown by just 3% a year. It is a trend that simply cannot continue, but one that will be unavoidable as long as inflexible federal rules guide state policies.

There is a common-sense way to change course: Stop treating Medicaid as a one-size-fits-all dictate from the federal establishment and start giving states the flexibility to do what is in the best interests of their citizens. Give states flexibility -- both programmatic and administrative -- and let each state design the most appropriate consumer-driven health care program for its citizens. A framework like this will drive innovation, best practices and ensure that states are focused on quality and cost containment.

In the weeks ahead, the U.S. Department of Health and Human Services is reportedly planning to announce expedited ways for states to get waivers for their Medicaid programs. While this is meant to be a step toward easing the Medicaid bureaucracy, it misses the larger point: The best ideas for improving Medicaid do not come from Washington -- they come from the states.

That's because our first priority is helping our citizens, not aiding the growth of the federal establishment.

The hearing is a promising signal from Washington -- an acknowledgment that neither federal nor state policy exists in a vacuum and that the laws enacted in Washington have a profound impact on state budgets and policy options.

The fact is, good ideas developed at the state level can inform and direct national initiatives.

Medicaid reform, while unquestionably a monumental challenge, can also be a tremendous opportunity, providing a new frontier for states to show Washington what can be accomplished when you think outside the Beltway.

It's too bad Washington did not think of this idea first.


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