Reform Update: Sebelius open to talks on care for poor

As political debate continues in nearly half of the states in the country over whether to expand their Medicaid programs, HHS Secretary Kathleen Sebelius said Monday that her agency was open to discussing with state leaders their proposals on how to provide healthcare to their poorest residents.

Speaking before an annual meeting of the National Conference of State Legislatures, according to published reports, Sebelius urged state lawmakers to move past political debate of the plan that has been a focal point for opposition since the passing of the Patient Protection and Affordable Care Act in 2010.

Under the law, the federal government would pay 100% of the costs for the first three years for states that expand Medicaid coverage to residents making as much as 138% of the federal poverty level. After that, the federal match would phase down to 90% by 2020.

Despite the new funding on the table, only 23 states have opted to expand their Medicaid coverage. Meanwhile, 21 states have declined and six have yet to decide.

During the meeting Monday, a CMS official reportedly told lawmakers the federal government would still pay for the total costs for the implementation of expansion plans adopted by states that decide to participate.

But that continues to be a hard sell in states where governors and lawmakers remain defiant.

As Sebelius made her latest overture in Atlanta, two GOP Michigan legislators gathered supporters in Lansing to reiterate their distaste for the Affordable Care Act. “We're giving up our security bit by bit by bit in favor of big government,” state Sen. Patrick Colbeck said according to a report in theDetroit News. Colbeck and state Rep. Nancy Jenkins rallied support for their bill that would reform the state's Medicaid program by moving all of its enrollees into health savings plans.

Some states, though, have grabbed onto earlier olive branches from the Obama administration. Sebelius previously signaled to states that HHS would be amenable to alternative expansion models, and Arkansas and Iowa have both submitted waiver applications seeking to move newly eligible low-income residents into private coverage sold on the new health insurance exchanges.

As reported by the Associated Press, an Ohio Senate subcommittee heard testimony Tuesday on a new analysis that projects the state could save money by expanding Medicaid.

In response to the report conducted by the Health Policy Institute of Ohio, state Sen. Dave Burke, who chairs a Medicaid subcommittee, said the analysis shows that curbing Medicaid's growth to a certain rate is feasible. But the Republican chairman says lawmakers must craft the right policy to achieve it.

Democratic state Sen. Capri Cafaro cited the analysis in her proposal to extend the Medicaid program and cap its cost growth at an annual rate of roughly 3.5%, compared with the current rate of 7.2%.

Ohio is one of six states that remains undecided over whether to accept Medicaid expansion under the Patient Protection and Affordable Care Act.

The Legislature has been gridlocked regarding expansion since it was first proposed by Republican Gov. John Kasich.

America's Health Insurance Plans, the trade association that represents the nation's heath insurance industry, has asked HHS to give the health exchanges a one-year moratorium from enforcement against any violations, according to a report by Inside Health Policy.

AHIP cites uncertainty over whether HHS can assure information technology and program infrastructure will be effectively working as reason for the request.

Insurers are also asking for a two-year enforcement “safe harbor” for qualified health plans' issuers that acting in good faith to come into compliance.

In its request, the trade group points out HHS has recognized that the administration and insurance companies alike will face significant logistical challenges, and that the extra time will be needed for the government and the industry to work on compliance issues.

The National Health Council responded that a two-year delay in enforcement would give undeserved leniency to plans that are acting in bad faith.

Follow Steven Ross Johnson on Twitter: @MHSjohnson