Tavenner Must Dispel Notion Obamacare Is Playing Favorites

Lanhee Chen is a research fellow at the Hoover Institution who also teaches public policy at Stanford University. He was the policy director of Mitt Romney's 2012 presidential campaign.
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Washington experienced a rare moment of bipartisanship yesterday when Marilyn Tavenner, U.S. President Barack Obama's nominee for Administrator of the Center for Medicare and Medicaid Services, breezed through her confirmation hearing before the Senate Finance Committee. It was a significant moment because the agency she will formally lead administers health-care services to roughly one in three Americans and plays a major role in carrying out the Patient Protection and Affordable Care Act.

Overall, Tavenner performed well at the hearing and answered questions in a way that suggests she will be an able leader of the agency -- even while she is given the unenviable task of putting in place President Obama's misguided health-care reform bill.

However, there was one answer she gave at the hearing that was both inadequate and troubling. Senator Jay Rockefeller, a Democrat from West Virginia, asked Tavenner why the agency had approved a waiver allowing Arkansas to expand Medicaid through the use of a premium assistance program.

Tavenner's response was essentially twofold. First, she stated that Arkansas had neither formally applied for nor been formally granted a waiver. While this is technically true, it is well-known that Arkansas has been in serious discussions with CMS about its proposal and that its approval is almost certain. Arkansas state officials -- all the way up to Democratic Governor Mike Beebe -- have publicly declared that the Obama administration has agreed to approve their plan. In fact, the state's Medicaid director said about the Obama administration in aninterview earlier this week, "There is no doubt in any of our minds that they've approved the concept, that they've approved the principles and that we're on very solid footing." Even without a formal waiver request, Tavenner could have acknowledged the ongoing discussions with Arkansas and explained why CMS will likely approve the plan.

In the second part of Tavenner's response to Rockefeller, she referred to a CMS document that defines what the agency considers to be an acceptable premium assistance program -- in other words, a program to help Medicaid beneficiaries afford private coverage. Though the document offers some helpful tips for states considering the same approach as Arkansas, it falls woefully short of the kind of comprehensive guidance states would need to determine whether their own premium assistance programs would be approved.

The Arkansas Medicaid-expansion plan is being watched by other states because it seems to provide a "third-way" for Republican governors to expand Medicaid while avoiding some of the political heat and policy pitfalls associated with that decision.

Tavenner's inability to clearly answer Rockefeller's question on the merits points to a bigger problem: The perception that the Obama administration arbitrarily entertains health-policy innovations from some states, but not others. Indeed, Tavenner's answer provides no better explanation for the difference than simple partisan politics. Perhaps it's no coincidence that states with Democratic governors like Arkansas have gotten a favorable hearing from the administration while states with Republican governors like Utah have been less fortunate. Even Rockefeller -- himself a Democrat -- noted that the administration needed better answers to the "mystery" of why some states were getting waivers and special treatment while others were not.

The Senate will, in all likelihood, confirm Tavenner. After that happens, she should make it a priority to dispel the notion that partisanship is driving the administration's decisions regarding states' efforts to adopt the Affordable Care Act. Her agency should quickly generate useful and comprehensive guidance regarding premium assistance plans like the one being developed in Arkansas. Governors should not have to guess when it comes to figuring out how to best balance the desires of their states' citizens against the demands of the act.

In short, Tavenner should translate the bipartisanship she experienced yesterday into leadership that puts good policy ahead of partisan politics going forward.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.