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John Kasich Backs Slow Medicaid Rollback, but With More Money

Gov. John R. Kasich of Ohio, second from right, during a meeting on Ohio’s budget in April.Credit...Julie Carr Smyth/Associated Press

WASHINGTON — Ohio’s influential Republican governor, John R. Kasich, said on Monday that he could accept a gradual phaseout of the expansion of Medicaid under the Affordable Care Act, but only if Congress provides states with more money than the House health care bill included and more flexibility to manage the health program for the poor.

Mr. Kasich’s statement could prove significant as Senate Republicans try to find near unanimity on a bill to repeal and replace President Barack Obama’s signature domestic achievement. His position points to a compromise that moderate Senate Republicans could embrace — but that could challenge the chamber’s most conservative members.

“I don’t have a problem with phasing down the enhanced federal payments,” said Mr. Kasich, who is working with several other Republican governors from states that have expanded Medicaid. “But it can’t be done overnight, and it has to be done with the resources and the flexibility that are needed so people don’t get left behind. You just can’t be cutting off coverage for people.”

Senator Mitch McConnell of Kentucky, the majority leader, can afford to lose only two Republican senators as he struggles to get 50 votes for a health care bill whose deadline keeps slipping. A vote he had hoped to get by the end of this month may not come until July.

Twenty Republican senators come from states that have expanded Medicaid, and many could be influenced by Mr. Kasich, including Senator Rob Portman of Ohio.

The governor said in an interview that he also hoped to bring in a few Democratic governors as the Senate reaches a pivotal week in its efforts to repeal major provisions of the health care law, under which 20 million Americans have gained coverage.

The future of Medicaid remains a divisive issue among Senate Republicans, but several weeks of intense negotiations behind closed doors have clarified the situation: The question for most Senate Republicans is no longer whether to end the expansion of Medicaid, but how fast.

Thirty-one states have expanded Medicaid, with the federal government paying at least 90 percent of the costs for newly eligible beneficiaries. Moderate Republican senators say they are pushing to reduce the federal payments gradually over seven years, from 2020 to 2027. By contrast, the repeal bill passed by the House in early May would abruptly end the extra federal contributions for people added to the rolls in 2020 or later.

Among the senators indicating support for a seven-year phaseout are three Republican senators from Medicaid expansion states: Mr. Portman, Dean Heller of Nevada and Shelley Moore Capito of West Virginia. More than a million people have gained coverage through the expansion of Medicaid in those states.

Mr. McConnell has recommended a three-year phaseout.

Mr. Kasich said a gradual reduction of federal contributions over seven years could be workable only if Congress also provided states with significantly more authority to manage costs.

Yes, he said, Republicans have promised for years to repeal the Affordable Care Act. But “I don’t think campaign promises that leave millions of people without the help they need are any excuse,” he said. “Sometimes you make a promise, and you have to be big enough to say maybe I promised wrong.”

Mr. Kasich and three other Republican governors — Asa Hutchinson of Arkansas, Brian Sandoval of Nevada and Rick Snyder of Michigan — outlined the kind of discretion they wanted in a letter to Mr. McConnell. Those governors lead states represented by four Republican senators, more than enough to determine the health bill’s fate.

The governors said, for example, that Congress should end the requirement that state Medicaid programs cover nearly every prescription drug approved by the Food and Drug Administration.

Republican leaders say the Senate will vote on the bill using procedures that preclude a Democratic filibuster and allow passage by a simple majority vote. But it is unclear whether Senate rules would allow inclusion of Medicaid changes that give governors more flexibility.

Democrats say the gradual phaseout is no solution. “States would still have to end their expanded Medicaid programs because of the large cost shift” from the federal government to states, said Aviva Aron-Dine, a health economist who worked in the Obama administration. “That approach would not preserve anyone’s coverage in the long run.”

After the transition, she said, states would have to pay three to five times as much as under current law for new enrollees. In addition, she said, at least eight Medicaid expansion states have laws that end the expansion if federal payments are reduced. “Even with a slower reduction in federal funding,” she said, “these states would have to end the Medicaid expansion in 2020.”

Mr. Kasich said that if people lose Medicaid, they must have other options, like coverage through the health insurance exchange, with tax credits that make insurance affordable.

Before voting, the Senate will need an analysis of the bill from the Congressional Budget Office, which will require about two weeks to assess its cost and impact on insurance coverage. The budget office said 23 million more people would be uninsured in 2026 under the House bill than under the Affordable Care Act. If the estimate for the Senate bill is even remotely similar, it could scare off some Republicans.

Republicans, holding 52 seats in the Senate, have little margin for error. Two Republicans senators, Susan Collins of Maine and Lisa Murkowski of Alaska, oppose a provision of the House bill that would cut off federal funds for Planned Parenthood clinics.

Another provision of the House bill has drawn less attention but could have broader implications: It would generally prohibit consumers from using federal tax credits to buy insurance that includes coverage of abortions.

Robb Cowie, a spokesman for the Oregon Health Authority, a state agency, said: “In Oregon, every plan on the insurance exchange but one, which is affiliated with a religious organization, offers abortion coverage. In other words, virtually all Oregonians would be ineligible for tax credits if the bill is passed” with this restriction.

The House bill would make sweeping changes in Medicaid, and many Republican senators agree with the basic approach. It would, for the first time, put Medicaid on a budget, limiting federal payments to states for care provided to tens of millions of low-income people — not just those who gained coverage under the Affordable Care Act, but also children, people with disabilities and nursing home residents who have been eligible for decades under the law that created Medicaid in 1965.

The House bill would set an annual limit on federal payments to each state, starting in 2020. The limits for most Medicaid beneficiaries would rise with the medical component of the Consumer Price Index, with an extra percentage point allowed for people who are 65 or older or have disabilities. Many Senate Republicans support that formula, but several conservatives, including Senator Patrick J. Toomey of Pennsylvania, have advocated a lower growth rate.

Senator Heller, who is up for re-election next year, said that if federal payments did not keep up with the cost of care, it could leave a hole in Nevada’s budget.

Thomas Kaplan and Jennifer Steinhauer contributed reporting.

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A version of this article appears in print on  , Section A, Page 13 of the New York edition with the headline: Kasich Backs Gradual Medicaid Rollback With More Money and Flexibility. Order Reprints | Today’s Paper | Subscribe

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