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Governors Finalizing Proposal to Revamp Medicaid By
Amy Goldstein The nation's governors are nearing agreement on a plan that would fundamentally redesign Medicaid, handing states vast new powers to set health benefits for the poor, in exchange for ending part of the federal promise that subsidies will keep pace as the program grows. The draft plan, which has considerable support among Republican and Democratic governors, is similar in some of its basic contours to a proposal that the Bush administration issued four months ago to revamp the country's largest public insurance program. But the governors' version, which is to be refined during the next few days, would give states greater freedom over Medicaid and would loosen caps on federal payments that the administration has proposed. And in a significant -- and expensive -- departure from President Bush's proposal, the governors say they would support changes to the program only if the federal government agreed to pick up about $40 billion a year that states now pay toward health care for elderly and disabled people who are eligible for both Medicaid and Medicare. The changes are vehemently opposed by some congressional Democrats, liberal health care advocacy groups, and two Democratic governors, who have issued public dissents. On the other hand, the top administration official who oversees Medicaid and Medicare, Thomas A. Scully, yesterday balked at the federal government's absorbing the full cost of patients eligible for both programs, saying, "that's a massive cost to the federal government." The draft is the result of four months of intense work by the National Governors Association (NGA), which is trying to exert the same influence over the future of Medicaid that the organization wielded in the overhaul of the welfare system during the mid-1990s. In addition, Health and Human Services Secretary Tommy G. Thompson, a former longtime governor, has been pressing for the NGA to take a stand on Medicaid, in hopes that the governors would design a plan that dovetails enough with Bush's thinking and, thus, give impetus to the issue in Congress. "If they don't want to do it," Scully said of the governors, "it's not going to happen." Medicaid is a shared responsibility of the federal government and the states, providing health insurance to 44 million people. Its future is of acute concern to the governors because its costs have been rising rapidly lately as states' economic well-being has deteriorated. As a result, the program is the biggest single reason that many states' budgets are out of balance. Under the administration's proposal, states would not be required to change their programs but would be given a strong financial incentive to do so. States would be encouraged to experiment: changing benefits, shifting more people into managed care, offering different services in different parts of a state, charging patients more for services or extending some benefits to people who now are uninsured. States willing to make such changes would be given extra federal money for the next several years, although their subsidies would be cut for the following three years to make up the difference. They also would be able to combine their Medicaid programs with another program that insures children whose parents are working but are relatively poor. Last February, the NGA refrained from critiquing the proposal immediately, agreeing, instead, to assign 10 governors to write their own Medicaid plan and negotiate with the administration. The draft, being circulated for reaction to members of that task force, is based largely on a proposal that the president's brother, Florida Gov. Jeb Bush (R), produced last week with Iowa Gov. Tom Vilsack (D). It agrees with the administration's basic idea that states could, on a voluntary basis, choose to receive an "allotment" from the federal government, instead of a subsidy for every patient who enrolls. But the governors would not make that switch for as many people. The plan would preserve the current funding method for people who qualify for Medicaid under federal law and would reserve the new method only for additional patients they are not required to enroll but accept anyway. In addition, the governors want the federal government to review every few years whether the allotment is adequate. The issue has proved so controversial that governors disagreed even over the question of how many of them had to approve their plan before it could be presented to Thompson, with some contending that it should not be forwarded to the administration until all the governors convened in August -- too late, others argued, for congressional action to be likely this year. In the end, sources familiar with the deliberations said late yesterday, the 10 governors who worked on the plan will try to reach consensus this week and submit it to the administration. Liberal advocacy groups have been seeking to draw attention to the plan -- and their criticism of it -- since last week. Yesterday, New Mexico Gov. Bill Richardson (D) became the second member of the NGA's Medicaid task force to oppose the plan, issuing a statement that said he had "grave concerns" about its financing. Late last week, Missouri Gov. Bob Holden (D) also dispatched a statement, saying, "I cannot in good conscience support a Medicaid reform proposal that does not include adequate protections for the population we serve." A spokeswoman for Sen. Edward M. Kennedy (Mass.), one of the Senate's leading Democrats on health care issues, said yesterday that he was contacting governors, urging them similarly to oppose the plan. Copyright ©
2002 Global Action on Aging
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