HHS Secretary Mike Leavitt Testifies on Medicaid Plans in Budget Proposal at Senate Hearing
HHS Secretary Mike Leavitt on Wednesday testified before the Senate Finance Committee on plans in the fiscal year 2006 budget proposal released last week by President Bush to reduce federal Medicaid costs, CQ HealthBeat reports (CQ HealthBeat, 2/16).
The budget proposal includes reductions of $60 billion in Medicaid funds over the next 10 years through a number of provisions, such as limits on state claims for federal matching funds, restrictions on transfers of assets by seniors to obtain Medicaid eligibility and reductions in reimbursements for prescription drugs (California Healthline, 2/9).
In addition, Leavitt said that the Bush administration hopes to provide states with more flexibility in their Medicaid programs. In a speech on Feb 1, Leavitt said that states should have the ability to offer less comprehensive Medicaid benefits to "optional populations," or those that they are not required to cover under federal law (Pear, New York Times, 2/17).
At the hearing, committee Chair Chuck Grassley (R-Iowa) "appeared open" to such a proposal, CQ HealthBeat reports (CQ HealthBeat, 2/16).
Leavitt also said that he opposed a bipartisan proposal for a national commission to study Medicaid, adding, "It's time for us to make decisions. ... There is a need for swift and early action" (Pugh, Miami Herald, 2/17).
Sen. Olympia Snowe (R-Maine) said that the call by the Bush administration for more flexibility in state Medicaid programs could represent a "euphemism" for reductions in federal funds for Medicaid (CQ HealthBeat, 2/16).
Sen. Max Baucus (D-Mont.) said, "If forced to make cuts in Medicaid this year, we should all realize that it is unrealistic and misleading to say that we are simply cutting fraud and closing loopholes" (AP/Baltimore Sun, 2/17).
According to CongressDaily, some critics have questioned comments by the Bush administration about more flexibility in state Medicaid programs because "among the programs the Bush administration's FY06 budget targets for extinction are some of the very ones that provide states with flexibility now" (Rovner, CongressDaily, 2/17).
Grassley said, "We need to have some immediate savings" in Medicaid, "with enough flexibility for the states so they can absorb the changes." He said that agreement on Medicaid reform likely will prove "very, very difficult," adding that he hopes Congress and the governors will partner to address the issue.
According to Virginia Gov. Mark Warner (D), chair of the National Governors Association, the hearing represented "the beginning of a process" that could lead to fundamental Medicaid reform. However, Warner said that governors "don't want to see the federal government simply shift costs to the states" (New York Times, 2/17).
Governors have acknowledged that they must revise the administration of state Medicaid programs, but they also "have warned" Bush "not to balance the budget on the backs of states," which currently face high Medicaid costs, the AP/Sun reports (AP/Baltimore Sun, 2/17).
Sara Rosenbaum, a law professor at George Washington University, said that governors "should have learned by now that what the word flexibility really means is, 'We're going to cut your budget and take away constituencies you had for money'" (CongressDaily, 2/17).
Janet Wells, policy director at the National Citizens' Coalition for Nursing Home Reform, also raised concerns because half of nursing home patients are optional Medicaid beneficiaries. "We worry that states would use the new flexibility to reduce inspection of nursing homes and the enforcement of standards," she said (New York Times, 2/17).