* Obama supports moving provision in law to 2014 from 2017
* Governors give cautious praise to his proposal
By Jeff Mason and Lisa Lambert
WASHINGTON, Feb 28 President Barack Obama
extended an olive branch on Monday to U.S. states struggling to
implement his healthcare law, offering support for a proposal
that would give them some flexibility in carrying out its key
Obama's signature healthcare reform plan aims to lower
costs and extend coverage to millions of uninsured Americans,
but the controversial law has divided Democrats and Republicans
and handed states -- more than half of which are suing over its
constitutionality -- a handful of bureaucratic challenges.
The president acknowledged those challenges on Monday
during a meeting with state governors at the White House.
He highlighted a part of the law that would allow states to
tailor their own solutions to healthcare reform in 2017 if they
fulfilled the same goals as his reform push and said he
supported a measure put forward in Congress to move that date
up to 2014.
"If your state can create a plan that covers as many people
as affordably and comprehensively as the Affordable Care Act
does -- without increasing the deficit -- you can implement
that plan," Obama told the governors.
"And we'll work with you to do it," he said.
States are charged with carrying out many of the reforms,
including establishing exchanges where individuals can buy
The plan made more people eligible for Medicaid, the
healthcare program for the poor that states operate with
partial reimbursements from the federal government. When states
balked at the huge price tag of larger Medicaid rolls, Congress
agreed to pay 100 percent of the costs for new enrollees.
Even with that concession, though, many states have been
worried they cannot afford to implement the plan after the
financial crisis and recession induced an historic collapse in
many states' revenues. And Medicaid costs are rising as large
numbers of laid-off workers turn to it for assistance.
Medicaid on average takes up a third of states' budgets. At
the meeting, Obama asked the governors to create a bipartisan
commission to study ways to bring down its costs.
Senator Orrin Hatch, the most powerful Republican on the
Senate Finance Committee, called the president's announcement a
public relations stunt.
"States don't need more press releases and talking points,
they need action from Washington to reduce the burdens of this
disastrous law," he said.
POLITICS, HEALTHCARE DIVIDE
The White House announcement was the latest push by the
federal government to show sympathy for states' concerns. Last
week, the Health and Human Services Department announced a
variety of grant programs to help fund state programs to review
health insurance rates, pay for the administration of insurance
regulation, and provide home healthcare to Medicaid enrollees.
Obama singled out former Massachusetts Governor Mitt
Romney, a likely contender for the 2012 Republican presidential
nomination, when talking about state reforms.
"I know that many of you have asked for flexibility for
your states under this law," Obama told the governors.
"In fact, I agree with Mitt Romney, who recently said he's
proud of what he accomplished on healthcare in Massachusetts
and supports giving states the power to determine their own
healthcare solutions. He's right."
Obama's comments may complicate Republicans' efforts to
differentiate between the reform Romney instituted as governor
and the overhaul enacted by Obama that is reviled by many party
leaders, who derisively call it "Obamacare."
More than half of the 50 states are suing to stop the plan
in federal court, saying it usurps individuals' and states'
Republican governors from states challenging the law, such
as Mississippi's Haley Barbour, another possible presidential
candidate, embraced Obama's proposal of flexibility but
maintained their overall opposition to the law.
Kansas Governor Sam Brownback, a Republican and former U.S.
senator, said that the proposal is "a positive thing" but it
did not change his overall opposition to the law.
"We will implement what we are required to do. We're going
to fight against it every bit of chance that we can,"
Brownback told reporters after the White House meeting.
(Editing by Philip Barbara)