Governors Concerned Health Reform Plans Will Place Burden on States

About a dozen governors in a conference call on Thursday with a bipartisan group of six Senate Finance Committee negotiators expressed their concerns about the potential effect of proposed Medicaid eligibility expansions on their states' finances, the New York Times reports.

The governors on the call included:

• Haley Barbour (R) of Mississippi;
• Phil Bredesen (D) of Tennessee;
• Jim Douglas (R) of Vermont;
• Jennifer Granholm (D) of Michigan;
• Christine Gregoire (D) of Washington;
• Sonny Perdue (R) of Georgia; and
• Ed Rendell (D) of Pennsylvania (Pear/Herszenhorn, New York Times, 8/7).

Governors are concerned with several proposals currently being considered in Congress. Finance Committee Chair Max Baucus (D-Mont.) is considering a proposal that would have the federal government fund for five years any extra costs resulting from an expansion in Medicaid eligibility. States would then share responsibility with the federal government for funding the program, at a proportion that would vary from state to state.

A House compromise plan, struck between House Energy and Commerce Committee Chair Henry Waxman (D-Calif.) and Blue Dog Democrats, would expand Medicaid eligibility to people younger than age 65 with incomes no higher than 133% of the federal poverty level. Under that plan, states would pay a portion, possibly 7%, of the cost of covering the new beneficiaries. The original House bill had the federal government paying all of the additional costs (Krauss, New York Times, 8/7).

Douglas, chair of the National Governors Association, said, "We want to be helpful," but "we don't want to pick up the tab. We have states that can't meet their payroll, that are cutting services and laying off employees" (Pear/Herszenhorn, New York Times, 8/7).

Gregoire said, "We can't afford to have Congress raise the eligibility for Medicaid coverage without paying for it." Washington Medicaid Director Doug Porter said of the House plan, "This is profoundly disappointing and makes a bad situation much worse" (Krauss, New York Times, 8/7).

Baucus Says Federal Government Cannot Cover Entire Cost

After the call, Baucus said, "We're sensitive to their concerns. We want to do this right but make them sensitive to our imperatives, too, which are: we've got to pay for all of this." However, he said that the federal government "can't foot the entire bill for the states" (Young, The Hill, 8/6). He added, "We cannot let U.S. taxpayers pay the full state bill for the expansion" (Wayne/Armstrong, CQ Today, 8/6).

Baucus also said in a statement, "We are in close contact with a number of governors and will continue working with them to ensure health care is more affordable for families, businesses -- and state budgets." Senate staffers say cost-cutting measures will be proposed to address the governors' concerns (Krauss, New York Times, 8/7).

Conrad, DeParle Comment on Administration's Take

Sen. Kent Conrad (D-N.D.), a member of the Finance Committee negotiating team, said that President Obama has "made clear his concern about Medicaid expansion being done in a way that is coordinated carefully with the governors," The Hill reports.

White House Office of Health Reform Director Nancy-Ann DeParle said there are White House officials who are "concerned about what's going to happen to the states," adding, "We've told [governors] we're working with you and we understand where you're coming from. We've told them the health care reform is one step at a time" (The Hill, 8/6).