Which States Are So Eager for “Flexibility”?

By Martha Heberlein

Back in January, a group of current and former Republican Governors sent a letter to Congress asking for “flexibility” to ignore the stability protections in the Affordable Care Act. Today, the Energy and Commerce Committee is holding a hearing that will focus, in part, on this request.

Let’s look a little more closely at the states pushing for this “flexibility.” Of the states signing the letter:

  • NINE (Alabama, Florida, Georgia, Idaho, Kansas, Louisiana, Mississippi, Pennsylvania, and Texas) do not provide any optional coverage to parents or other non-disabled adults.  This leaves them with few options except to target significant numbers of children or to roll back coverage for seniors in need of long-term care.
  • TEN (Arizona, Florida, Idaho, Iowa, Maine, Michigan, New Jersey, North Dakota, Pennsylvania, and Wisconsin) are proposing tax cuts in their budgets. For example, Governor Scott of Florida has proposed cutting the corporate income tax to 3% (and eliminating it by 2018), costing the state $459 million in FY 2012 alone.
  • SIX (Iowa, Louisiana, Nebraska, South Carolina, South Dakota, and Texas) have substantial “rainy day” funds (substantial meaning that they equal at least 5% of the current year expenditures). Of these states, only Nebraska has proposed drawing down some of its rainy day fund to help fill its budget gap.

The following chart provides a quick comparison of the states signing the flexibility request and the budget choices they have made. (Click on the chart for a full-sized version.)MOE Signatories Chart 3-1.jpgWe recognize that states are facing tough budget pressures, but focusing their attention on the need for increased “flexibility” in Medicaid ignores the options they already have, both within the program and in their full budgets. It also jeopardizes the coverage of millions of children, families, pregnant women, seniors, and people with disabilities who rely on Medicaid for the insurance coverage they need.