2.1 Preamble

Governors across the country face significant challenges in their efforts to ensure the sustainability of health care programs amidst rising health care costs. To put these programs on a fiscally sustainable path, governors are increasingly exploring alternatives to the less desirable cost-cutting methods that involve reducing provider payments, limiting benefits and restricting coverage.

Realizing the full potential of these efforts will require a new era of collaboration between states and their federal partners. Through the work of NGA's Health Care Sustainability Task Force, governors have identified opportunities for the federal government to further promote health care innovation by providing the flexibility and support states need to develop, test and implement new payment and delivery models. Governors believe that an enhanced state-federal partnership is key to improving the nation's health while easing the financial burden on governments, employers and families. The only way for this state-federal partnership to truly work, is for governors to be actively engaged in our nation's quest to improve healthcare outcomes and costs.

Guiding Health Care Principles

  • Federal policies and programs should be designed to improve health outcomes and produce per capita savings for the federal government and states.
  • Any federal requirements imposed on states should be properly funded; the federal government should not shift costs to states.
  • The federal government should streamline the process for reviewing and approving state proposals to innovate in Medicaid and other programs.
  • In developing state-federal programs, states should be given sufficient time and flexibility to implement and build the necessary capacity.
  • The federal government should provide timely guidance to states.

2.2 Specific Issues for Consideration

2.2.1 Children's Health Insurance Program

Congress should act in a timely manner to extend federal funding for the Children's Health Insurance Program (CHIP). Since 1997, CHIP has successfully helped provide children and pregnant women in working families with affordable health insurance coverage. Governors believe CHIP should be maintained until children and pregnant women covered by the program have access to affordable alternative coverage options.

2.2.2 Health Care Innovation

State health programs are driving innovation in the delivery and payment of services by testing new models aimed at lowering the trajectory of health care spending while improving quality and outcomes. To ensure the success of these efforts, federal policies and programs should be designed to:

  • Reduce the per capita growth of health care spending while improving health care quality and outcomes;
  • Give states more flexibility to operate programs for Medicare-Medicaid enrollees and pursue delivery system reforms that achieve desired outcomes, provided that eligibility and benefits are not substantially changed;
  • Provide up-front federal investment for state initiatives that are ready to demonstrate a positive return on that investment;
  • Transition to a payment system that rewards efficient, high-quality care and promotes increased transparency and accountability;
  • Adopt common, objective quality measures and transparent performance metrics for all payers, including Medicare; and
  • Engage Medicare and the private sector, including health care providers, health plans and employers in health care transformation efforts.

NGA's Health Care Sustainability Task Force identified a number of specific actions that the federal government should take to support state health care transformation. Key among them are streamlining the approval process for state innovation proposals; allowing states to share in federal savings that result from their efforts; developing a path to permanency for long-standing, successful state programs; and broader dissemination of best practices and lessons learned from other states.

2.2.3 Health Care Workforce

Ensuring access to health care services requires an adequate number and distribution of physicians, nurses and other trained health care professionals. The nation's population growth, aging residents, insurance expansions and other delivery system changes require a renewed focus on our nation's health care workforce. Governors urge the federal government to examine and implement programs to ensure states have an adequate workforce that is prepared to serve diverse populations. Moreover, federal investments in the health care workforce should reflect input from governors, who are best positioned to assess the needs of their states and help craft solutions. Federal support and coordination are integral to helping states avoid shortages of key health care personnel.

2.2.4 Healthy State Initiatives

States are taking innovative approaches to reducing health care costs by instituting programs that encourage citizens to make healthier lifestyle choices. Governors encourage the federal government to support state efforts to promote healthy lifestyles and improve overall health, while reducing stress on the health care system and decreasing costs. This includes initiatives tailored to address the unique needs and challenges facing the nation's youth. In addition, governors urge Congress to maintain federal support for evidence-based programs that connect families to needed services, thereby equipping them with the appropriate tools to make healthy choices.

2.2.5 High-Impact Drugs

High-cost breakthrough drugs, known as high-impact drugs, support governors' ability to improve health outcomes in their states. It is important to find sustainable approaches to developing and providing these drugs, especially within Medicaid and corrections health programs. Governors urge the federal government to work with states to develop viable policy solutions that ensure appropriate access to high-impact drugs and protect the long-term fiscal health of Medicaid and other public programs.

2.2.6 Medicaid Financing

Congress should consult governors before making any significant changes to the 52-year-old federal-state Medicaid financing structure. Governors have developed innovative state Medicaid programs in reliance on federal Medicaid law. Governors can provide Congress valuable insight into how statutory changes could impact states' ability to maintain a balanced budget and serve their constituencies. Additionally, statutory changes should not shift the risk of unforeseen rising medical costs or increased Medicaid enrollment to state governments. For any Medicaid financing proposal to be successful, governors' input must be incorporated.

2.2.7 Medicaid Extenders

The Qualifying Individual program, Transitional Medical Assistance program and Express Lane Eligibility provide important support for state Medicaid programs and the beneficiaries they serve. Congress should work with states to ensure that these and other extender programs reflect the new health insurance landscape, support administrative simplification and protect the most vulnerable. Governors also encourage Congress to provide states with more certainty by enacting longer-term extensions where appropriate.

2.2.8 Prescription Drug Abuse

Prescription drug abuse and heroin addiction are major public health and safety crises confronting communities across the United States. To help reverse this epidemic, governors urge the federal government to develop a coordinated national response that involves health care providers, law enforcement and other key stakeholders. The federal government should work in close coordination with governors to develop policies that complement state efforts and focus on achieving the following goals:

  • Enhance public education and awareness
  • Maximize use of state prescription drug monitoring programs
  • Improve provider education and prescribing practices
  • Provide safe, convenient and cost-effective options for disposing of unused prescription drugs
  • Expand access to addiction treatment and alternative treatments for pain
  • Crack down on drug trafficking, particularly interstate trafficking

Time limited (effective Winter Meeting 2017 – Winter Meeting 2019).
Adopted Winter Meeting 2017.