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New this morning: President Obama offers states early out of the federal health care law

Photo by Philip Jean

Photo by Philip Jean

In his speech to the governors at the winter meeting of the National Governors Association, Obama said he would approve of allowing states to opt out of the Affordable Care Act by 2014 if they could offer health care coverage for as many people as they would under the law and not increase the deficit. Under the original law, states could not opt out until 2017. Many of the most important provisions of the bill, including the mandate requiring Americans to buy health insurance or pay a penalty, go into effect in 2014.

Georgia Gov. Nathan Deal was among the governors who had sought more flexibility to adjust Medicaid eligibility. The new health care law significantly expands the Medicaid program, adding up to 20 million more Americans nationwide and an estimated 650,000 in Georgia.

The federal government will pick up virtually all the cost of the expansion in the early years of the new law, but in later years the burden will fall to the states. Many governors had objected, saying it would severely burden their states' stressed budgets. Obama proposed the creation of a bipartisan group of governors to look at ways to reduce Medicaid costs in the short term.

"Gov. Deal has every intention to produce health reform that is affordable and flexible for Georgians," said Stephanie Mayfield, Deal's press secretary. "When we submit our plan to Health and Human Services in 2013, it will be up to the Obama administration to stay true to their promise."