New York Times, Wall Street Journal Examine Issues Related to Medicaid Reform

Two newspapers on Thursday examined issues related to proposed changes to Medicaid. In its fiscal year 2006 budget proposal, the Bush administration seeks to reduce Medicaid funding through a number of provisions, including 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.

HHS Secretary Mike Leavitt also has said that the administration hopes to provide states with more flexibility in Medicaid programs (California Healthline, 2/22). Summaries of the articles appear below.

• New York Times: The Times examined how Leavitt, former governor of Utah, often points to the state "as an illuminating example that other states might consider" for Medicaid reform -- despite concerns from some health care advocates that such "state-by-state Medicaid experiments could fracture and fragment" the nation's health care system. Some say that Utah's program has "reframed and reshaped the national debate over Medicaid and health care" for the uninsured, "broadening the focus from the question of who does and does not have health insurance, to what constitutes basic health coverage," according to the Times. The Times reports that some observers have said Utah is a "good laboratory" for experimenting with Medicaid reform, given its relatively small population, large hospitals that provide the bulk of care and "ethic of private charity" encouraged by the presence of the Church of Jesus Christ of Latter-Day Saints (Johnson/Abelson, New York Times, 2/24).
  
  
• Wall Street Journal: Some state officials are "fighting back" against the Bush administration's goal of cracking down on the "creative accounting methods" used by states to "improperly inflate their Medicaid costs" to receive more federal matching funds, the Journal reports. According to the Journal, the "looming fight over the financing tactics is a microcosm of what's likely to be a protracted battle between the administration and the states over what changes should be made to Medicaid." With many state officials pushing to maintain the accounting methods, some Medicaid experts are "question[ing] whether Congress will be able to save as much as the administration proposes by tightening financing rules," which could prompt lawmakers to turn to "tougher steps, such as broad" reductions or caps on spending, according to the Journal (Lueck, Wall Street Journal, 2/24).

Although the Medicaid program "was never intended as a middle-class entitlement or as inheritance protection for the children of well-off seniors," the "latter is precisely what has happened," a Journal editorial states. To end the practice of some seniors' shifting assets to qualify for Medicaid, the federal government should encourage seniors to purchase individual long-term care insurance, according to the editorial.

In addition, the editorial suggests lawmakers update the "look-back law," which would begin the "three-year grace period for giving away assets" after a senior enters a nursing home or enrolls in Medicaid; eliminating an existing home exemption when calculating assets; and requiring seniors who require long-term care to take out reverse mortgages.

The editorial concludes, "Medicaid was created 40 years ago to care for the needy. The rest of us have an obligation to pay for our own care -- or to protect our wealth with private insurance" (Wall Street Journal, 2/24).