A discussion with NGA Executive Director Dr. Ray Scheppach


A discussion with NGA Executive Director Dr. Ray Scheppach

Wednesday, May 5th, 2010 - 17:04
Wednesday, May 5, 2010 - 16:38
Dr. Ray Scheppach, the executive director of the National Governors Association, discussed the challenges and opportunities of the health reform law with Prof. Jack Meyer of the schools of Public Policy and Public Health at the University of Maryland.

JM: What are the major challenges involved in implementing the new national health reform legislation?

Dr. Scheppach: A key challenge is to provide states with enough funding to meet expanded Medicaid enrollment and the likelihood of higher reimbursement rates to health plans and health care providers. There will be a big push to enroll people already eligible but not participating in Medicaid, and current estimates of this increase may be too low. Newly eligible people (all poor and near-poor adults will be eligible in 2014) will benefit from Medicaid coverage but states may not have enough long-term federal support to meet these needs.

JM: What is the most important positive development that could emerge from health reform?

Dr. Scheppach: If we can figure out how to build the state-level insurance exchanges the right way, states will have a strong new tool to drive favorable changes in the health care delivery system and lower spending in the long term. Between Medicaid and the insurance exchanges, collectively, states are likely to be purchasing on behalf of more than 100 million Americans. This will provide leverage to bring the hospitals, physicians, and health plans to the table and adopt those new approaches to delivery and payment that lead to better health outcomes and lower costs. States can build better managed care systems and provide higher payments to provider systems that implement electronic health records.

JM: The new legislation calls for the federal government to pick up all of the costs of expanding eligibility for Medicaid in the early years, with states making a modest contribution in later years. Can states adjust to this timetable?

Dr. Scheppach: Several factors will make it difficult for states. First, we have a jobless recovery at this time. Second, the increased funding for provider payments only affects some providers (e.g. primary care physicians) and that increase is only temporary. Finding enough physicians to meet the expanded demand for care will be a real challenge. Third, many states have pulled funding from trust funds or increased borrowing, and this money will have to be paid back. Fourth, many states have too few staff who have the knowledge to carry out all of these new functions, and we will have a minimum of 24 new Governors next year.  Finally, it is very difficult for states to raise taxes. States will not be back to 2008 revenues levels until about 2012 or 2013, just before the expansion kicks in. So, I am concerned about states’ ability to shoulder more responsibility, even in later years.

JM: What are we going to do about long-term care? That is only addressed to a small degree in this legislation.

Dr. Scheppach:  Health reform will not be complete until we address long-term care. We need to integrate Medicaid and Medicare and use pooled funding to better manage the care of high-needs older Americans and people with disabilities.

The bottom line is that we need to control long-term Medicaid spending in order to avoid continuously reducing the amount of resources available for other needs, such as education and infrastructure.


Dr. Scheppach was appointed executive director of the National Governors Association in 1983. He oversees the day-to-day operations of the association and works closely with NGA’s chair and vice chair and their staffs to help identify priorities for the nation’s governors. Before coming to NGA, Dr. Scheppach worked for seven years at the Congressional Budget Office – the last two as deputy director.

Jack Meyer is a Professor in the Schools of Public Policy and Public Health at the University of Maryland and a Principal in the Washington, DC office of Health Management Associates.