WASHINGTON — President Barack Obama told a group of governors Monday that he would support moving up the timetable in which states may opt out of the federal health care law, making a major concession to critics of the legislation.
In his speech to the governors at the winter meeting of the National Governors Association, Obama said he would approve of allowing states to opt out of the Affordable Care Act by 2014 if they could offer health care coverage for as many people as they would under the law and not increase the deficit. Under the original law, states could not opt out until 2017. Many of the most important provisions of the bill, including the mandate requiring Americans to buy health insurance or pay a penalty, go into effect in 2014.
Georgia Gov. Nathan Deal was among the governors who had sought more flexibility to adjust Medicaid eligibility. The new health care law significantly expands the Medicaid program, adding up to 20 million more Americans nationwide and an estimated 650,000 in Georgia.
The federal government will pick up virtually all the cost of the expansion in the early years of the new law, but in later years the burden will fall to the states. Many governors had objected, saying it would severely burden their states’ stressed budgets. Obama proposed the creation of a bipartisan group of governors to look at ways to reduce Medicaid costs in the short term.
“Gov. Deal has every intention to produce health reform that is affordable and flexible for Georgians,” said Stephanie Mayfield, Deal’s press secretary. “When we submit our plan to Health and Human Services in 2013, it will be up to the Obama administration to stay true to their promise.”
The new opt-out provision was first proposed by a bipartisan group of senators that included Scott Brown, R-Mass., and Ron Wyden, D-Ore.
“I think that’s a reasonable proposal. I support it,” Obama told governors of both parties. “It will give you more flexibility more quickly, while still guaranteeing the American people reform. If your state can create a plan that covers as many people as affordably and comprehensively as the Affordable Care Act does — without increasing the deficit — you can implement that plan. And we’ll work with you to do it.”
Obama’s move comes as a number of states including Georgia, nearly all with Republican attorneys general, have filed suit to invalidate the law, arguing that requiring all Americans to purchase health insurance is unconstitutional. Three federal courts have ruled that the current law is constitutional, while two have struck it down.
The governors said Obama’s willingness to support an earlier opt-out from the law was welcome, but they stopped short of fully embracing it.
“A number of our fellow governors would be very interested in supporting this,” said Gov. Christine Gregoire, D-Wash., NGA chairwoman. “We need to talk to them to see if we can put our support behind that bill as the National Governors Association.”
The more flexibility in managing health care the better, said Gov. Mary Fallin, R-Okla. But, she added, “we’ll see if it’s going to be flexible enough.”
Republican Mississippi Gov. Haley Barbour also responded cautiously. “We have to learn more about it before we know,” he said.
White House officials said the administration was not backing away from the individual coverage requirement, but that the provision, ultimately, is only a means to an end. If states can show they’ll achieve the same goals through a different approach, the administration is willing to sign off. White House officials said they still believe the individual mandate is the best way to meet the law’s coverage and affordability targets.
The opt-out provision would require the approval of Republicans in Congress, who opposed the original health-care law. House Majority Leader Eric Cantor, R-Va., argued Monday that Obama’s announcement only reinforces the case that the national health care law impedes job growth.
“It is just making our point that not only have we seen a variety of exceptions and waivers issued for the private sector under the act, but now we’re seeing how that act is troubling states in a real way as far as their trying to figure out the fiscal answer,” Cantor told reporters.
AJC staff writer Carrie Teegardin and The Associated Press contributed to this article.
LOCAL IMPACT
Last month, more than two dozen governors including Georgia’s Nathan Deal called for more flexibility in deciding who qualifies for Medicaid. The request had advocates concerned that the state could cut services to some of its neediest residents.
Governors have asked the Obama administration to eliminate a rule created by the federal health care overhaul that requires states to maintain current Medicaid eligibility standards. They argue that more leeway is needed to make tough budget decisions and better manage Medicaid based on states’ needs.
At the National Governors Association’s semi-annual meeting over the weekend, leaders of the group formed a bipartisan committee to explore in detail what kind of flexibility over Medicaid the governors can agree to seek from federal health officials.
Right now, states are required under the Affordable Care Act to keep coverage stable for adults in Medicaid until Jan. 1, 2014, when insurance exchanges will kick in, and for children in Medicaid and the Children’s Health Insurance Program until Sept. 30, 2019.
Advocates worry that ending the mandate could mean some needy children, pregnant women and others might no longer qualify for coverage. Medicaid and PeachCare for Kids, Georgia’s CHIP program, cover about 1.6 million poor and low-income residents.
Starting in 2014, the Medicaid expansion will add an estimated 650,000 people to the state’s Medicaid rolls, according to a study by the Kaiser Family Foundation. The report estimates the added cost to the state at $714 million between 2014 and 2019. The governor’s office has projected that expansion will cost the state $2.5 billion during the next decade.
- Misty Williams
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