WASHINGTON - After meeting with President
Bush, governors expressed concern Monday that the administration's
proposal to cut some $40 billion from the Medicaid health insurance
program for the poor would further strain already tight state
budgets.
"All governors are very, very reluctant to see any kind of major
reduction to the system," Republican Bob Riley of Alabama said.
Democrat Janet Napolitano of Arizona said the president was too
focused on a specific figure that would help reduce the federal
deficit. "If the president wants Medicaid reform, then he needs to
have a reform discussion that's not driven by an arbitrary budget
number," she said.
Some governors, however, said they realized they eventually must
compromise. They also wanted the ability to experiment in order to
lower costs. Many were encouraged by parts of the administration's
budget proposal that would give states more flexibility.
At the meeting, Bush promised to work with governors to restrain
soaring Medicaid costs and revamp the program. But he also indicated
he would keep trying to eliminate some federal aid.
"We want Medicaid to work," Bush told the governors before an
hourlong, private question-and-answer session. "The system needs to
be reformed and we want to work with governors."
But the one detail Bush emphasized was his plan to cut federal
dollars in an effort to stop state Medicaid accounting practices
that the administration contends cheat taxpayers.
Many state leaders say the money derived this way is essential.
Federal officials say the practice artificially inflates health care
prices to bring in more federal cash, which states sometimes use for
other purposes.
"We're worried" about the transfers, Bush said. "We put that on
the table for discussion, so that the system works the way it's
supposed to work."
Riley said Bush's proposed cuts would cost Alabama $600 million
over the next four or five years. Meanwhile, the number of Alabama
residents on Medicaid has climbed from one in 10 to nearly one in
five. Cuts will mean fewer services and probably force people off
the rolls, Riley said.
Medicaid costs have soared in recent years, driven by rising
health care costs, an aging population that relies largely on
Medicaid to pay for nursing homes, and a recession that sent more
people to state-supported health care.
This year, Medicaid will pay for care for 53 million people -
women and children, poor, elderly, disabled. It will cost an
estimated $329 billion. Enrollment has increased by 40 percent over
the past five years.
A group of governors has spent the past month hoping to develop a
plan to present to the administration and Congress that would
counter Bush's cuts with changes that would save money without
hurting state budgets.
A deal, either among governors or in discussions between them and
Health and Human Services Secretary Mike Leavitt, has proved
elusive.
Governors said Bush was encouraging; though Republicans were more
welcoming of the administration's stance than Democrats, partisan
lines did not define them. There were signs that governors
recognized the need for compromise. "There's opposition to any
reduction but we have to be realistic," said Democrat Bill
Richardson of New Mexico.
"It's not about this week," said Mark Warner of Virginia, a
Democrat. "Getting it right is more important than getting it
quick." Warner said the struggle over the final budget numbers will
rest with Congress.
Even the impact of the budget was in dispute. Governors
complained of $60 billion in cuts over 10 years. But the
administration, and the National Governors Association analysis,
said reductions were offset by additional spending, leaving the cut
at about $40 billion.
Governors from all sides of the political spectrum say now is the
time for a significant re-examination of Medicaid. But what that
means has not become clear.
Democrat Tom Vilsack of Iowa talks about preferred drug lists.
Republican James Douglas of Vermont emphasizes keeping people on the
Medicaid rolls, but reducing the program's costs. Republican Mark
Sanford of South Carolina wants to let patients and their families
decide how to spend a set amount of health care dollars.
Bush's budget would make it more difficult for older people to
transfer their assets to family members so they qualify for Medicaid
coverage for nursing home care, one of the large cost-drivers of the
system. The president's spending plan for the fiscal year beginning
Oct. 1 also would affect an effort to lower drug prices, which
several governors said showed promise, and a change to taxes on
providers, which governors said would shift costs to them.
ON THE NET
National Governors Association: http:www.nga.org
