Why can't the argument be made for turning over Medicaid and Medicare completely over to the states?
Don't accept the premise that Republicans need to "do something" to make Obamacare work. No, we need to have the debate whether or not the federal government should be involved in healthcare.
Turning all health care programs entirely over to the states is doctrinaire conservatism. In most cases, it might be the answer. However, some states are better equipped to tackle this proposition than others. Two notable exceptions which would likely have enormous difficulty doing this are Illinois and California. Illinois is bankrupt and CA is literally a basket case of high taxation, etc.
A “healthy” debate is probably the remedy—but it’s highly doubtful the current political chasm will allow such reasonable action any time in the foreseeable future.