This weekend, governors from across the country are coming to Washington for the annual National Governors Association Winter Meeting.  They will be meeting with each other, Congress and the White House about many topics – but healthcare will take center stage.

Washington has spent much of the past few months debating how best to move forward with the Affordable Care Act (ACA) and Medicaid and – importantly – governors have so far had several opportunities to weigh in.  Both the House and Senate solicited formal written comments from governors about the repeal of the ACA and reforms to the Medicaid program, and the powerful Senate Finance and House Energy & Commerce Committees have held roundtables with select governors to discuss “replace” policy. Congress has pledged to take states’ input into account when formulating policy.

The timing of this weekend’s meeting, therefore, is critical. Congress is still working to finalize the strategy and legislation alongside the White House, and everyone is looking to governors for their input and support. So, what have they said and what will they say?

To understand where this is headed, focus on four Republican governors who have emerged as leaders in the discussions among Republicans about how to proceed:  Governors Brian Sandoval from Nevada, John Kasich from Ohio, Bill Haslam of Tennessee and Scott Walker of Wisconsin. While these four governors are just a small sample of the range of positions governors will advocate for this weekend at NGA, they represent the variation of perspectives among Republicans.

Three of the four chose to expand Medicaid, only two were able to, and one has been a stalwart opponent of expansion. One established a state-based ACA exchange while three did not. All four oppose the federal approach to health care reform taken by the ACA, all want fewer federal mandates and more flexibility for states, and all want a more market-driven approach. While these stances embody traditional Republican principles of freedom from federal government intervention and a reliance on market principles, there is also agreement that no one should fall through the cracks and people should have access to affordable health care coverage.

It’s in the next layer of detail where things get challenging, illustrating why repealing and replacing the ACA is so difficult.

Governor Walker has called for quick repeal while Governor Sandoval warns that “to adopt another system that disregards these investments [as result of ACA] will have an adverse effect on our healthcare system, waste millions of dollars and cost hundreds of Nevadans their jobs.”

Governor Walker also advocated for block grants, while Governor Haslam detailed in a 10-page chart all of the ways the federal government can lift constraints on the Medicaid program, without calling for block granting the program.

Governor Kasich strongly recommended that states be granted the flexibility to retain Medicaid expansion and its enhanced federal matching percentage while Governor Sandoval is proud of Nevada’s status as having one of the most improved uninsured rates in the country, with 400,000 more Nevadans covered since expanding Medicaid. Rolling back the Medicaid expansion will significantly diminish the number of people covered in both Nevada and Ohio – and across the country.

While consensus is difficult, compromise will be found by considering the extent to which Republican governors and Congress can find common ground on the three following areas:

  1. How much money will the federal government cut in the course of reforming Medicaid? The block grant proposal in the U.S. House 2017 budget would cut $7 billion this year and $169 billion by 2026, about a third of the entire Medicaid program. Ultimately, “savings” to the federal government under a block grants result in funding cuts to the states.  In fact, a 2011 report from the Republican Governors Association stated that “Congress and the Administration cannot continue to simply shift the cost of the Medicaid program onto states in an effort to proclaim federal deficit reduction. As governors, we believe there is an opportunity to reduce Medicaid costs for both states and the federal government while improving the quality of the program overall.”
  2. How much additional flexibility can the governors get from new CMS officials? Seema Verma, the Nominee for CMS Administrator wrote the book on state flexibility.  She helped a half-dozen states secure flexibility from the Obama Administration, which had strong views on how Medicaid should be run.  She is likely to give governors a lot of leeway to implement work requirements, drug testing, higher co-pays & premiums, HSAs and more. Many of the changes Republican governors are asking for can and will be done administratively.
  3. How much does coverage really matter? There are 20 million people who have gotten coverage through the ACA.  How politically difficult would it be to reduce coverage for this population? Federal cuts to Medicaid, changing subsidies to tax credits, getting rid of the mandate, among other policies, will reduce coverage and make health care more expensive for people.  How much his matters will be a major factor in what governors tell Washington.

This weekend will be telling on how many answers there are to these questions as we lead up to House action on ACA repeal and replace.