Governors push the limits of health reform

Innovative state leaders hit roadblock with health reform waivers

Topics: Health Policy, Market Trends, Strategy

October 18, 2011

A handful of Democratic governors are struggling to implement the federal health reform law while seeking waivers to adopt additional reforms of their own.

The overhaul allows states to apply for innovation waivers in 2017, which allow them to bypass components of the law if they still meet coverage and cost requirements. But some states worry that the timeline creates problems because most of the health reform law takes effect in 2014. President Obama in February endorsed legislation to make the waivers available in 2014, but the proposal has yet to be heard by a committee.

Round-up of Democratic governors that may go their own way
In Oregon, officials have passed a state health reform plan that would overhaul physician payments and allow public employees to enroll in Medicaid. However, the state needs the Obama administration to grant waivers to pursue such reforms. Gov. John Kitzhaber (D) said, "We obviously are interested in moving much sooner" than the current law allows, adding, "States are going to hit a wall way before 2017."

Kitzhaber has met with Obama administration officials to discuss the state's waiver plan and said CMS Administrator Donald Berwick was supportive of the idea. At the same time, Kitzhaber has been among the most vocal supporters of the federal law and has accepted more than $100 million to implement it in his state.

Similarly, Montana Gov. Brian Schweitzer (D) last month announced plans to apply for a waiver from a federal reform provision mandating the creation of state-based health insurance exchanges. Instead, Montana hopes to create a single-payer health insurance system and enroll public employees in Medicaid.

Schweitzer said he is skeptical that he will get permission to move forward because the administration recently denied the state another Medicaid waiver. "Since we're proposing to save citizens' money, you'd expect some kind of chorus and music, maybe presentation with some plaques and flowers," Schweitzer said, adding, "But in my experience, that's not what you get."

Vermont in May approved a single-payer plan that would be run by a public board. The state is working with the Obama administration on waivers to pursue the plan. According to Anya Rader Wallack, chair of Vermont's Green Mountain Care Board, the state without waivers "can't implement our reforms as fast as we'd like to. It'll make a difference in terms of the degree of simplification in implementation and the savings associated with that."

The Obama administration maintains that it is open to ideas that diverge from the federal health reform law. Nick Papas, a spokesperson for the White House, said, "Giving states the chance to pursue innovative ideas that strengthen the health care system is one of our top priorities" (Kliff, Post, 10/16).