National Governors Association Members To Meet To Discuss Medicaid Reform Proposal

Members of the National Governors Association in a "closed-door discussion" in Washington, D.C., on Wednesday are expected to discuss a proposal to reform Medicaid "and, from there, lobby the Bush administration and Congress," the AP/San Jose Mercury News reports (Tanner, AP/San Jose Mercury News, 1/19).

Medicaid -- which accounts for $250 billion annually in combined federal and state costs -- is "expected to be a key feature" in the budget proposal President Bush is expected to unveil in February, the Los Angeles Times reports. Bush might suggest reducing the federal deficit by half by 2009 through a variety of methods, including possible reductions in mandatory spending, according to the Times (Simon, Los Angeles Times, 1/19).

Governors in a bipartisan letter to Bush in December 2004 urged the administration to avoid imposing federal restrictions on Medicaid. The administration has begun auditing states' techniques used to shift costs to the federal government. In addition, the administration has proposed a rule that would require states to prepare annual estimates of total improper payments and error rates for Medicaid and SCHIP, identify the causes of errors and recover excess payments to care providers.

In the letter, the governors said it is "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"(California Healthline, 1/3).

According to the Times, "some of the most intense lobbying against spending reductions is expected to come from members of the president's own party" (Los Angeles Times, 1/19). The governors are expected to meet to discuss the issue at least once more in February (AP/San Jose Mercury News, 1/19).

Arkansas Gov. Mike Huckabee (R), NGA vice chair, said, "We understand that the federal government needs to address the deficit, but at the same time (most) states are forced to have a balanced budget, which means if we have a significant drop in funding ... we will deal with it by drastic and in some cases very painful cuts to essential services" (Los Angeles Times, 1/19).

Virginia Gov. Mark Warner (D) said, "The goal here is to find some bipartisan consensus. Governors need to coalesce first. What we want to ensure is that reform doesn't simply get translated into cost-shifting to the states" (AP/San Jose Mercury News, 1/18).

Michigan Gov. Jennifer Granholm (D) said, "We also need some indication from Washington that they will assist us and not make [Medicaid cuts] part of the budget process ... because that's going to give all the cuts to the states." She added, "We would like to be able to offer some populations a more commercial type of [health insurance] package, fewer bells and whistles, fewer benefits, in exchange for the ability to keep them covered" (AP/Detroit Free Press, 1/19).