Congress May Not Approve NGA’s Medicaid Reform Proposal, Report Says
The Medicaid reform proposal that the National Governors Association executive committee may endorse as early as today would leave states "worse off" and would not likely receive approval from Congress or the Bush administration, according to a report from the Center on Budget and Policy Priorities, CongressDaily reports. The proposal, developed by a 10-governor NGA taskforce, is similar to the Bush administration Medicaid reform proposal but has some "significant additional caveats" and "sweeteners," CongressDaily reports. The NGA plans to use the proposal in negotiations with Congress and the Bush administration on Medicaid reform (Heil/Rovner, CongressDaily, 6/5).
Under the Bush administration proposal, states would have to maintain comprehensive Medicaid coverage for the two-thirds of beneficiaries whose income levels are low enough that the federal government mandates that they be covered, but for beneficiaries covered at the states' discretion, states could change Medicaid rules and regulations, simplify and alter eligibility requirements and revise or reduce benefits. States would no longer have to apply for federal waivers to deviate from federal standards for Medicaid eligibility and benefits. The proposal also would give states a fixed amount of money, rather than matching funds, for the beneficiaries whom they choose to cover. States that decide to join the new optional Medicaid program would receive additional federal funding of $3.25 billion in 2004 and $12.7 billion over seven years, but federal funding would decrease for the three years after that, resulting in a net of no cost to the federal government. Governors objected to the Bush administration proposal because they said it would not protect states against unexpected Medicaid costs that could arise from changes in the economy, natural disasters, disease outbreaks, terrorist attacks or the development of expensive drugs and other treatments. The governors support the proposal to give states more power to alter Medicaid benefits, eligibility rules and copayments. Under the governors' proposal, which was proposed by Iowa Gov. Tom Vilsack (D) and Florida Gov. Jeb Bush (R), federal funding for Medicaid beneficiaries whom states are required to cover would continue unaltered, but states would receive a fixed annual allotment for beneficiaries covered at their discretion. Unlike the Bush administration proposal, the governors' proposal would allow that cap to be increased to cover unexpected costs, such as increases in unemployment, natural disasters, disease outbreaks or the development of expensive medical treatments. The proposal also calls for the federal government to pay for costs associated with seniors eligible for both Medicaid and Medicare -- a provision not included in the Bush administration proposal. The governors' proposal also would give all states new power to alter their programs (California Healthline, 6/3).
Cindy Mann, a senior fellow at CBPP, said that a cap on federal Medicaid funding "shifts the risk of higher costs to the states" and would provide states with no incentive to improve or expand their Medicaid programs, CongressDaily reports. CBPP analyst Edwin Park added that the "protections" sought by the governors that would allow the cap to increase in certain cases would not protect the states from increased Medicaid costs because the "lag time for states getting any additional federal funds would be 'too little, too late' to respond to changes" such as statewide recessions, CongressDaily reports. In addition, Park said that the cost to the federal government to cover individuals eligible for both Medicare and Medicaid -- $100 billion over 10 years for prescription drug coverage alone -- "would be far too high for Congress to stomach," CongressDaily reports. The "sweeteners" sought by the governors would make the "caps in federal funding acceptable to the governors, but they are unlikely to be included in any serious proposal," Park concluded (CongressDaily, 6/5). The CBPP report is available at online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.