This paper continues a discussion of the issues addressed in the previous Bipartisan Policy Center Governors’ Council report, Reforming Medicaid Waivers: The Governors’ Council Perspective on Federalism Today. Medicaid provides essential health care services to millions of low-income and disabled Americans. As the largest state-federal partnership program, it is also on the front lines of many important and contentious issues in 21st-century federalism. Medicaid requires intense collaboration between states and the federal government, and it presents an ongoing source of budgetary strain for both parties.
As governors, we’ve seen firsthand both the importance of Medicaid to many of our citizens as well as areas where the program falls short in best meeting their needs. We also have deep concerns about the long-term growth in the cost of this partnership. These cost pressures will increase in the years ahead as coverage expands under the Affordable Care Act. Already, many governors have been forced to eliminate or reduce benefits to enrollees and to continuously lower provider payments to the point that these reductions threaten the stability of hospitals and physician practices in their states.