Governors Launch Bipartisan Effort To Oppose Medicaid Funding Cuts
The National Governors Association in December began "mounting a bipartisan lobbying effort to stave off new federal limits" on Medicaid, the New York Times reports (Belluck, New York Times, 12/26/04). Federal officials are sending auditors to states to investigate techniques used to shift costs to the federal government. In addition, a proposed rule would require states annually to prepare estimates of total improper payments and error rates for Medicaid and SCHIP, identify the causes of errors and recover excess payments to health care providers. Other federal initiatives include proposals to:
- Link Medicaid payments for prescription drugs to actual market prices, which are lower than the amounts some states pay based on average wholesale prices reported by pharmaceutical companies;
- Allow states to make changes to Medicaid and SCHIP, such as increasing copayments and limiting eligibility, without first obtaining federal waivers;
- Allow local officials to provide different benefits in different parts of a state;
- Allow states to charge higher fees to higher-income recipients;
- Limit Medicaid payments for prescription drugs; and
- Implement caps on federal Medicaid spending (California Healthline, 12/23/04).
NGA on Dec. 22 sent a letter to President Bush stating that while "the status quo in Medicaid is not acceptable," it is "equally unacceptable in any deficit reduction strategy to simply shift federal costs to states." The letter stated that Medicaid costs now account for an average 22% of state budgets, creating "a strain on funding for other crucial state responsibilities" (Fram, AP/Charleston Gazette, 12/23/04). The letter added, "Medicaid currently accounts for 50% of all long-term-care dollars and finances the care for 70% of all people in nursing homes. Furthermore, 42% of all Medicaid expenditures are spent on Medicare beneficiaries, despite the fact that they comprise a small percentage of the Medicaid caseload and are already fully insured by the Medicare program."
The letter asked federal officials to assume more Medicaid costs under Medicare and not look to Medicaid to reduce the national deficit, the Times reports (New York Times, 12/26/04). The White House last week would not comment on whether it planned to propose savings by reducing Medicaid funding, the AP/Gazette reports (AP/Charleston Gazette, 12/23/04).
The "rare bipartisan unity" displayed in the letter indicated that governors of both parties "would press hard in the coming months to preserve or even increase" Medicaid funding, the Times reports. The governors plan to form a committee to lobby their Medicaid agenda, which includes a measure that would allow states to make changes to their programs without applying for federal waivers, which can take years to get approved.
Virginia Gov. Mark Warner (D), NGA's chair, said the governors were "much more in unanimity on this issue than they are on most issues," adding, "We do see on a regular basis that unless the governors step up, you will see cost-shifting done because it relieves the federal problem."
Arkansas Gov. Mike Huckabee (R), NGA's vice chair, said, "I certainly understand the need to balance the federal budget," but added, "Folks, our house is on fire too, and asking us to put out your fire is probably not the solution" (New York Times, 12/26/04).
Summaries of an opinion piece and editorial addressing Medicaid funding appear below.
- Daniel Sisto, Albany Times Union: Medicaid "challenges" in New York are "substantial," and the state should "fight any attempts to cut health care funding," Sisto, president of the Healthcare Association of New York State, writes in a Times Union opinion piece (Sisto, Albany Times Union, 12/26/04).
- Newark Star-Ledger: Although Bush faces "difficult fiscal hurdles in his upcoming term," state budgets already are "under siege even without more federal Medicaid cuts," a Star-Ledger editorial states. Transferring more Medicaid costs to states would cause "devastating" results that "would mean fewer people receive coverage," according to the editorial (Newark Star-Ledger, 12/29/04).