Delaware Gov. Jack Markell -- NGA's New Chair -- Talks Medicaid

After a weekend conference in Williamsburg, Va., governors are still trying to figure out what the Supreme Court's ruling means for the future of Medicaid.
by | July 16, 2012

Delaware Gov. Jack Markell was elected chairman of the National Governors Association during its annual meeting this weekend in Williamsburg, Va. Governing caught up with Markell on Monday to ask him about health care reform, sequestration and the future of the NGA:

Ryan Holeywell: The big topic at your meeting was the Medicaid expansion. Governors are still trying to figure out what the Supreme Court decision means. What do governors need to know before deciding whether to expand?

Gov. Jack Markell: Math is math. It’s not Democratic of Republican. (A)s we look at the math, there’s a couple things we look at. We look at the cost of the status quo and the big cost of doing nothing. What I’m referring to is … people get sick, they get sicker, they go to the emergency room of the hospital. It’s the most expensive care possible… the rest of us with insurance pay for it.

The first thing we want to make sure of is (whether) our understanding of the math is correct with respect to what kind of increased reimbursements we’d get. It varies somewhat by state.

So, A, you’ve got to work through the math of what that looks like. We essentially said to the feds, say for us whether we’re thinking about it correctly. And B, we want to make it clear that if the deal changes, and the federal government reduces its commitment, that we’re not going to be left holding the bag. We wanted to make that very clear. So that’s really what it is.

I think it was very interesting participating in the sessions of governors of both parties about that. Whichever way different states fall with respect to expansion, we all recognize there’s more we have to do within our own states to try to move away from the fee-for-service model, which is so incredibly expensive.

RH: What sort of leadership role can NGA play on this issue when its membership is so divided? Will it mostly be an information clearing house?

JM: First of all, until the Supreme Court ruled, there was certainly not any unanimity. We didn’t get too engaged in the back-and-forth. Governors were coming from such different perspectives. Now, it’s the law of the land. The best role NGA can play is to recognize that different governors from different states will make their own decisions. My view is everyone is entitled to their own opinion, but not their own facts.

RH: In Delaware, you plan on moving forward with the full expansion, correct? 

JM: It’s really because we recognize the huge cost of doing nothing. We look at the math, and it looks to be a good deal.

RH: What’s your message to some of your Republican colleagues who say they won’t move forward with expansion? Do you sympathize with their situation at all, given the obligations that come with Medicaid expansion? Or do you agree with Gov. Malloy, who said they're "willing to cut off their nose to spite their state?”

JM: My view is they’re doing to do their own analysis. That’s what the people of their states expect them to do. I am interested in what their alternative is. What are they going to do instead? By not expanding, there’s tens of thousands of people in their state who won’t be covered. 

The other thing that needs to be factored in is DSH (Disproportionate Share Hospital) money. Under the Affordable Care Act, that money is going away (the program provides some federal funds to hospitals to help cover the cost of indengent care). There’s been a theory that if that money went away, more people would be covered, and the hospitals would be getting compensated for patients for whom they weren’t previously compensated. It’s going to be a challenge for states that lose the DSH money.

This is a decision for each governor to make … there doesn’t have to be unanimity.

RH: The other big issue is going to be sequestration. I've heard mixed messages from people in state and local government. On the one hand, they know this is an issue, and we need to reduce the deficit. On the other hand, nobody wants to lose money for their programs. What's NGA’s message?

JM: There are conversations within NGA ongoing. There were some conversations over the weekend, but nothing definitive.

RH: Most people I've spoken with in state departments of transportation weren’t thrilled with the recently passed highway bill. It seems to just buy us some time through accounting gimmicks. How will states address infrastructure when Washington has kind of punted on this?

JM: It didn’t get as much attention this weekend as health care, jobs, and education. There were some quieter conversations. But again, we’d all want to see more certainty and predictability. Transportation projects, as you know, require long lead times, and it’s difficult to make longer-term commitments without a longer-term source of federal money.

RH: There was a front page article in the Wall Street Journal today about how more and more states, even states with Republican governors, are cutting deals with Amazon to get sales tax. It seems like a fundamental shift at a time when states are trying to capture more revenue. What are your colleagues saying about all of this?

JM: It didn’t come up a lot. The conversations I heard were people encouraged. It’s a little bit less of an issue in Delaware, because we don’t have a sales tax.

RH: Speaking of revenue, your state this summer became the first to allow full- online casinos. What’s that going to do for your guys in terms of revenue, and how did you become the pioneer on this?

JM: We’ve had video lottery for years. We’ve had table games for a couple of years. The competitive landscape has changed dramatically. When I first took office… neither Pennsylvania or Maryland had video lottery. Now both of those states do. With such a big change in the competitive landscape, our view was we needed to help our existing venues be a bit more competitive.

What that meant was reducing the fee they pay the state, but I was committed to doing that in a way that’s revenue neutral. The way we did that was offering Internet gaming … for making up some of that money.

RH: Won’t those other states eventually do that too?

JM: We want to make sure we’re as competitive as we can be. I don’t see it being as huge a growth industry in the future as it has been the last 15 years. But it’s an important industry, and it’s a significant revenue source. This is not our economic development strategy – we have a much more focused strategy, not just helping this industry, but helping a variety of industries improve their economic climate.

RH: Earlier this year you had to stop your medical marijuana program after getting basically threatened by the administration. Any new developments on that?

JM: I have to say, it’s one of the most frustrating things we’ve had to deal with. A couple years ago, one of the deputy attorney generals at the U.S. Department of Justice issued a memo sorting out the guidelines on medical marijuana. It gave us some comfort … in our case, the only people who would be able to access medical marijuana would be people who got authorization from their physicians on a limited set of diseases. (W)e’d only have one distribution center in each county. It’s not something popping up on every street corner. We tailored the thing carefully, got the law passed, and shortly after it was passed, a different deputy attorney general published a significantly different guidance and suggested state employees – even acting in compliance with state law – could be targeted for arrest.  We got a letter from the U.S. Attorney saying the same thing.

My view of the way federal policy works now is the U.S. Department of Justice says to patients who are sick (that) they’re not going to focus prosecution resources on people who are using for legitimate purposes. My view is we’re saying ‘use it – we’re not going to bother you – but you’re on your own in terms of how you’re going to get it.’

RH: Tell me about your goals for your term as NGA chair. You want to focus on hiring people with disabilities?

JM: It’s an incredible issue. I don’t have anybody in my family with disabilities. The inspiration for me came nine years ago. I visited what was then an MBNA (now Bank of America) facility with 300 people whose jobs were making promotional materials. I met a guy who was 25, and I think he has Down syndrome, and he was making T-shirts. He said, “I got to go to work today.”  I said, “What did you do before you got this job?” He said, “I was at home for six years watching TV with my parents.” A light bulb went off for me. What an unbelievable improvement in the quality of life for this man.

The unemployment rate for people with disabilities is really high. There are so many people who’ve got the time and inclination to work. Employing people with disabilities is not just about doing a good thing. It’s about doing what’s really good for your shareholders. The idea is to spotlight successes across the country and give governors the tools they need to move the needle in their own states.

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