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Governors Ask Bush Not to Cut Medicaid

By Alan Fram, Associated Press

December 23, 2004





The nation's governors on Wednesday urged President Bush not to shift additional Medicaid costs to the states in his effort to reduce the federal deficit. 

The bipartisan plea came six days after another letter to Bush from the health-care industry, asking him not to propose carving savings from either Medicaid or Medicare. Medicaid provides health coverage for the poor and disabled, while Medicare helps cover the medical costs of the elderly and disabled. 

A White House spokesman would not comment on whether Bush will propose savings from either program. 

Both letters underscore the political hurdles the White House faces in paying for its priorities in the 2006 budget it will unveil in February. Bush wants to cut record federal deficits in half, reduce taxes, revamp Social Security and finance the war in Iraq, anti-terrorism efforts at home and other priorities. 

Medicaid, expected to cost the federal government about $190 billion next year, is paid for jointly by Washington and the states. State officials have complained in recent years that their financial burden for the program has mushroomed, thanks to growing caseloads and Medicaid spending for patients in nursing homes. 

"We agree that maintaining the status quo in Medicaid is not acceptable," said the letter from the National Governors Association. "However, it is equally unacceptable in any deficit reduction strategy to simply shift federal costs to states." 

The letter said Medicaid expenditures now average 22 percent of state budgets, causing "a strain on funding for other crucial state responsibilities." 

Signing the letter were Democratic Gov. Mark Warner of Virginia, the association chairman, and Republican Gov. Mike Huckabee of Arkansas, the vice chairman. 

The opposition by the governors would seem to spell internal GOP battling over any Medicaid savings proposals Bush might make. Of the 34 gubernatorial races set for 2005 and 2006, 19 are for positions currently held by Republicans, including California Gov. Arnold Schwarzenegger and Florida Gov. Jeb Bush, the president's brother. 

The letter from associations representing family physicians, dentists, hospitals and others said any Medicaid cuts "would drastically unravel an already frail health care safety net." 

It added, "Medicare must be able to meet increasing needs of an aging population that is growing in numbers." 

Health professionals contributed far more heavily this year to Republican candidates for federal offices, giving $38 million to the GOP and $22 million to Democrats, according to an analysis by the nonpartisan Center for Responsive Politics, which tracks political spending. 

Bush has said he believes automatically paid benefits -- which include Medicare and Medicaid -- should be considered for budget savings, but he has mentioned no specifics. Medicare is expected to cost more than $370 billion next year. 

Bush is considering asking Congress to give states more leeway for spending Medicaid funds, in exchange for eventually reducing federal expenditures for the program, said one congressional aide speaking on condition of anonymity. 

It is unclear whether he may seek to restrain Medicare spending -- less than two years after enacting new prescription drug coverage expected to add $400 billion or more to Medicare costs over the next decade. 

"We're going to continue to make sure health care is accessible and affordable, especially for low-income Americans," said White House budget office spokesman Noam Neusner. "That's an important goal for this president. We're also going to make sure we'll produce a disciplined budget."

 


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