National Governors Association Meeting Ends Without Deal on Medicaid Reform

The National Governors Association on Tuesday ended its annual winter meeting in Washington, D.C., without an agreement among governors and the Bush administration on Medicaid, the New York Times reports. NGA Chair and Virginia Gov. Mark Warner (D) said the two sides "have a growing consensus on some principles," and he expressed a desire to "plunge ahead" with negotiations (Pear, New York Times, 3/2).

White House Press Secretary Scott McClellan said that President Bush remains committed to reducing Medicaid's budget by $60 billion over the next 10 years. He added, "The president has outlined a plan for moving forward on strengthening Medicaid. What it will do is save some money by shutting down the loopholes and stopping the accounting gimmicks that go on in the program" (Connolly/Balz, Washington Post, 3/2).

HHS Secretary Mike Leavitt, who on Tuesday met with NGA, said the administration and governors have eight to 10 "areas of potential common ground." Specifically, Leavitt cited agreements emerging on the ideas that:

• Medicaid overpays for prescription drugs;
  
  
• The elderly should not be allowed to transfer their assets to their children to qualify for Medicaid nursing home coverage;
  
  
• Governors should be able to charge copayments to Medicaid beneficiaries based on income and should be able to use more cost-saving tools used by private insurers;
  
  
• States should have more flexibility to decide benefits; and
  
  
• Medicaid should designate home and community-based care as "a preferred alternative" to nursing home care (New York Times, 3/2).

Interviews with "numerous governors" indicate that the "consensus described by Leavitt does not exist," according to the Times (New York Times, 3/2). "We are still far apart," New Mexico Gov. Bill Richardson (D) said.

Ohio Gov. Bob Taft (R) said, "With the respect to the budget itself, we've made clear we oppose [the administration's cuts], and we'll see how that issue works out here in the next few weeks."

Wisconsin Gov. Jim Doyle (D) said the administration's proposed changes are "not acceptable," adding, "What they are saying to states is, 'We're going to cut you and give you more flexibility,' and the flexibility is you can cut people off."

Indiana Gov. Mitch Daniels (R), Bush's former budget director, said, "There's a lot of substantive agreement but honest tactical disagreement" (Washington Post, 3/2).

Some governors said that Bush's proposal to lower prescription drug spending would place the entire financial burden on pharmacies and little on drug companies. Doyle said the proposal was "not the right way to go" (Lueck, Wall Street Journal, 3/2).

Doyle also questioned the Bush administration's nursing home proposal, saying, "To suggest there is widespread abuse and that we can get big savings -- I really question that. In most cases, these are hard-working people who have put aside a small amount and desperately want to leave it to their children" (New York Times, 3/2).

Addressing a congressional proposal to establish a commission to examine Medicaid more closely, Washington Gov. Christine Gregoire (D) said, "We can't study [Medicaid] for two years. We've got to strike while we've got an opportunity."

Mississippi Gov. Haley Barbour (R) added, "Congress needs to trust the governors."

The governors are "convinced that they must focus on Congress to pursue their fight" against Bush's proposal, the AP/Las Vegas Sun reports (AP/Las Vegas Sun, 3/1). The outlook for Bush's Medicaid proposal in the Senate "is unclear," according to the Times (New York Times, 3/2).

Sens. Jay Rockefeller (D-W.V.) and Gordon Smith (R-Ore.) "expressed skepticism" that Bush's proposals could slow Medicaid's growth, according to the Post (Washington Post, 3/2). Smith said he supported creating a commission to study Medicaid, a proposal that also is supported by 19 other senators.

Rep. Joe Barton (R-Texas) said that Bush's goal to reduce Medicaid spending by $60 billion is "reasonable, but is it written in stone? Is it something we have to meet? The answer to that is no."

Rep. John Dingell (D-Mich.) said, "If the administration and the governors come up with a plan that truly provides more flexibility without harming beneficiaries, I am open to hearing it" (New York Times, 3/2). Members of the House seem "more willing to follow the Bush budget plan," according to the Post (Washington Post, 3/2).

NPR's "Morning Edition" on Wednesday reported on continuing discussions about rising Medicaid costs. The segment includes comments from Barbour; Daniels; Doyle; Arkansas Gov. Mike Huckabee (R), current NGA vice chair; Leavitt; and Richardson (Rovner, "Morning Edition," NPR, 3/2). The complete segment is available online in RealPlayer.