House Committee Chairs, Governors Reach Tentative Agreement on Proposals To Restructure Medicaid

House Budget Committee Chair Jim Nussle (R-Iowa) and House Energy and Commerce Committee Chair Joe Barton (R-Texas) on Wednesday said that they have reached a tentative deal with the nation's governors to delay Medicaid proposals, allowing the National Governors Association time to craft a plan, CongressDaily reports. The governors earlier this week ended their annual winter meeting without an agreement with the Bush administration on Medicaid changes.

Nussle said Congress would probably "push reconciliations back until September to give [NGA] enough time to work through their differences." He added, "We're forcing a process and setting a schedule. If we had not put the reconciliation process out there, the governors would have said 'wait until next year,' and next year never would have come." Nussle said that the governors in a letter had asked lawmakers to keep Medicaid discussions separate from negotiations on the federal budget.

NGA Chair and Virginia Gov. Mark Warner (D) said it is important to NGA that they not be "stuck with a number that you then have to form a policy around."

Barton noted that Medicaid spending reductions likely will be more difficult to pass in the Senate than in the House. He said Congress would "have all summer" to reach an agreement on Medicaid with support from NGA and the Senate.

Senate Budget Committee Chair Judd Gregg (R-N.H.) said, "I think we all agree the present Medicaid program is unsustainable." Referring to President Bush's proposal to reduce net Medicaid spending by $45 billion over 10 years, Gregg added, "A 1.2% reduction over five years in that rate of growth is hardly significant" (Rovner, CongressDaily, 3/2).

In related news, top-ranking AARP officials on Wednesday at a briefing in Washington, D.C., "vowed to oppose" many of Bush's proposals to reduce the growth of Medicaid by $60 billion over 10 years, The Hill reports (Cusack, The Hill, 3/3). AARP CEO William Novelli said, "A much more thoughtful and responsible approach is needed" than "arbitrary caps or cuts."

AARP officials "emphas[ized]" the need to retain coverage for "optional populations" that would lose some of their benefits under Bush's plan, according to CQ HealthBeat. However, AARP officials said Bush's proposal to reduce prescription drug costs could generate "real savings."

They also "didn't entirely rule out" supporting the White House proposal to rein in so-called "accounting gimmicks" used by the states to draw additional federal dollars, CQ HealthBeat reports. "[S]ome uses of these state financing mechanisms may not be appropriate," AARP said (CQ HealthBeat, 3/2).

AARP official Paul Cotton said Congress should consider cost-saving methods, including multistate purchasing pools. Officials said they are evaluating whether to endorse bills in both chambers (S 338, HR 985) that would establish a commission to evaluate Medicaid (The Hill, 3/3).

The Christian Science Monitor on Thursday examined negotiations between NGA and White House officials, stating that governors see Bush's proposal as "a simple shift from the federal budget, which can run deficits, to state budgets, which cannot."

Medicaid is the "single largest cut in the Bush budget," and it is "a bellwether for how Washington will cope with an increasing share of the nation's health costs," the Monitor reports (Russell Chaddock, Christian Science Monitor, 3/3).