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Virginia Gov. Bob McDonnell says Medicaid should be overhauled before it's expanded. (AP)

Governors Spar Over Medicaid And Health Exchanges

by Julie Rovner
Jul 13, 2012 (All Things Considered)

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The nation's governors — well, many of them, anyway — are gathering in Colonial Williamsburg, Va., for their annual summer meeting this weekend.

It's no easy trick for the National Governors Association to get Republican and Democratic chief executives on the same page, or even the same room.

This year, in the wake of the Supreme Court decision on the Affordable Care Act, it's even harder.

The decision upholding the law means state insurance marketplaces, or exchanges, for individuals and small businesses aren't going away. The exchanges, which can be set up by each state or put together by the federal government, need to be running by the fall of 2013.

Governors need to decide soon whether to go ahead with their own exchanges or let the feds do the job.

The high court ruling did make it optional for states to expand Medicaid to cover more low-income people. So governors have to decide whether their states will go ahead with that, or not, too. Quite a few have already said no.

The meeting kicked off Friday with dueling news conferences. On one side, Virginia Republican Gov. Bob McDonnell, host of the meeting, said it would be irresponsible to expand Medicaid, unless it is dramatically overhauled first.

His neighbor Democratic Gov. Martin O'Malley of Maryland said in a separate news briefing that he thinks his state will gain a competitive advantage by being early to expand Medicaid and adopt other aspects of the health care law.

What do the governors have in common? All of them are worried about money.

Unlike the federal government, the governors say they can't print more money. They have to balance their budgets every year. So they're wrestling with how much health care they can afford to provide, even with federal subsidies under the recently upheld law.

Delaware Democratic Gov. Jack Markell told me, "We've taken a hard look, and we have the opportunity to significantly expand the number of people in Delaware who have care. There's sufficient federal resources to pay for it. We think this is a good deal for the people of our state."

Nebraska GOP Gov. Dave Heineman held a different view on a Medicaid expansion. "Until you can prove to me it won't result in cuts to public schools in our state, to the University of Nebraska or state colleges or community colleges, or increases in taxes, then I'm not ready to move in that direction," he said in a scrum after a press conference.

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