Governors across the country face significant challenges in their efforts to ensure the sustainability of health care and human services programs amidst rising health care costs and uncertainty in human services programs that lack predictability in their reauthorizations. These circumstances present challenges to states as they work to keep their citizens healthy and safe.
To put health care 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. They are pursuing value-based health care reforms that lead to better health for their residents while reducing costs.
Realizing the full potential of these efforts will require a new era of collaboration between states and their federal partners. 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. The HHS Committee will prioritize work to control underlying health care and drug costs through federal government policies and programs and state innovation, and work with states on their ideas to further these efforts.
Guiding Health and Human Services Principles
- Federal policies and programs should be designed to improve outcomes for people as well as reduce the growth of health care spending for the federal government and states, with an emphasis on maintaining enrollment.
- Federal policies and programs should be designed and implemented with a recognition of the role social determinants play in health and well-being outcomes for individuals and families, including children.
- Federal policies and programs should better integrate behavioral health and primary care services and coordination of services across the continuum of care.
- States should be formally and meaningfully consulted with prior to any new federal requirements imposed on states, and these requirements 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 health and human services 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.
1.2 Federal Programs Critical to States
1.2.1 Temporary Assistance to Needy Families
In 1996, governors and the federal government agreed to end individual entitlement to cash assistance, replacing it with federal funding for state block grants for Temporary Assistance for Needy Families (TANF). TANF marked an historic shift in social policy by devolving to states and territories the authority to develop and implement innovative approaches to public assistance reform that would better serve low-income families and help individuals move from cash assistance and to stable employment.
Since that time, governors have made tremendous strides in transforming public assistance into a comprehensive, employment focused safety-net with emphasis on training, work placement and job retention. Yet, much work remains. As Congress acts to reauthorize TANF, the nation’s governors recommend the following guiding principles.
- Restore and strengthen state flexibilities over federal funding and eligibility to allow for continued innovations and efficiencies in service delivery.
- Eliminate unnecessary, costly and process-oriented federal regulations.
- Recognize the connection between addiction treatment and the income support safety net.
- Maintain the contingency fund and make it more timely and responsive to economic downturns.
- Work with states to develop performance outcomes that more fully measure the impacts of TANF for families in need.
- Establish bonuses for states rather than penalties to encourage and reward continued innovative approaches and reforms.
- Allow states to receive partial credit for hours worked toward the work participation rate.
- Congressional requirements should be enforceable and state implementation costs should not exceed expected benefits.
- Support more of a two-sided approach to family support by allowing TANF funds to also be used for the non-custodial parent, case management, training and employment, and ending the marriage penalty and higher work participation requirement for two-parent families.
- Ensure longer program reauthorizations rather than short-term extensions to ensure stability and predictability for states.
1.2.2 Supplemental Nutrition Assistance Program
The Supplemental Nutrition Assistance Program offers nutrition assistance to more than 40 million low-income individuals and families. As the largest food-assistance program, governors recognize the importance of this benefit and believe that the program should be maintained.
1.2.3 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.
Congress should consult governors before making any significant changes to the 53-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.
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.
1.3 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 growth of health care spending while improving health care quality and outcomes, with an emphasis on maintaining enrollment;
- 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 HHS Committee will continue its work to identify additional actions that states agree the federal government should take to address rising health care costs.
1.4 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.
2.5 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.
1.6 Prescription Drugs
Over the past several decades, persistent growth in prescription drug costs has put significant pressure on state budgets. Recently, pharmaceutical innovations have become a central part of this discussion, and, for states, the balance between access and affordability is a challenge. This balance is particularly difficult during a public health crisis, such as the opioid epidemic and the spread of the Hepatitis C virus, when the desire for widespread access to life-changing medicines is acute and strategies for rapid and effective dissemination present operational and fiscal challenges.
High-cost breakthrough drugs, known as high-impact drugs, also 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.
1.7 Substance Use Disorder
Substance use disorder (SUD) is a major public health and safety crisis confronting communities and states across the country. In January 2018, NGA announced consensus recommendations from governors on programs and policies the federal government should implement to help stop the opioid epidemic, and governors were pleased to see many of these recommendations included in the opioids legislation signed into law in October 2018. Governors will closely track and inform implementation of this law. The federal government will need to implement a coordinated national response that involves states, health care providers, law enforcement, and other key stakeholders to address this crisis. Additional sustained federal funding will continue to be a critical priority as states address the ongoing opioid epidemic. Governors, states, and the federal government will also need to adapt policy implementation and programs and possibly create new ones as the epidemic changes over time.
1.8 Maternal and Child Health
Governors recognize the critical need to improve health outcomes for mothers and children. The United States has seen a rise the maternal death rate over the last 25 years. States and the federal government can play a vital role by harnessing Medicaid and CHIP, which cover half of all births. In partnership with the federal government, health care providers and patient groups, governors should work to lower mortality rates and associated illnesses.
 Commission on Social Determinants of Health (CSDH), Closing the gap in a generation: health equity through action on the social determinants of health. Final report of the Commission on Social Determinants of Health. 2008, World Health Organization: Geneva
Time limited (effective Winter Meeting 2019 – Winter Meeting 2021).
Adopted Winter Meeting 2019.