NGA Expected To Approve Set of Medicaid Proposals

The National Governors Association on Monday during its annual meeting in Des Moines, Iowa, is expected to approve a slate of cost-saving proposals for Medicaid, the Arkansas Democrat-Gazette reports. Proposals under consideration from NGA include:

• Changing how Medicaid programs purchase prescription drugs by increasing the amount of drug company rebates collected by states, obtaining discounts from drug makers and incorporating methods currently used by Medicare to save money on drugs;
  
  
• Limiting the types of assets that can be transferred to family and friends to qualify for Medicaid-funded long-term care;
  
  
• Encouraging seniors to use "reverse mortgages" on their homes to refund Medicaid for services;
  
  
• Allowing states more flexibility to reduce spending; and
  
  
• Granting "broad discretion" to states to establish Medicaid copayments, deductibles and premiums (Bleed, Arkansas Democrat-Gazette, 7/18).

Governors on Sunday at a meeting with Senate Finance Committee Chair Chuck Grassley (R-Iowa) said their proposal has the support of all 50 governors. However, concerns expressed from health care advocates "have some governors, particularly Democrats, warning that opening the door to copays must be accompanied by limits that don't drive the poorest recipients off government-provided health insurance," AP/Long Island Newsday reports.

Illinois Gov. Rod Blagojevich (D) said, "There's a moral component to a budget," adding, "What do those numbers do? How do they help people?" Blagojevich said he supports the flexibility proposed by NGA, but he does not favor raising costs for poor and working families. Some governors said that they would not implement some of the changes to copays or coverage, "regardless of what [NGA] or Congress agrees upon," AP/Newsday reports.

Grassley said the NGA proposals are "really key to getting something done," adding, "We will not get a bipartisan agreement in Congress without a bipartisan agreement from the governors" (Tanner, AP/Long Island Newsday, 7/18). However, "Congress has shown little interest in embracing" the NGA plan, the Washington Post reports (Balz, Washington Post, 7/17).

NGA on Sunday also voiced concerns about how the 2003 Medicare law will affect dually eligible beneficiaries and states, AP/Newsday reports (AP/Long Island Newsday, 7/17). Under the 2003 law, drug coverage for dual eligibles will be transferred from state Medicaid programs to the new Medicare benefit. The so-called "clawback" provision requires states to pay the federal government 90% of the estimated amount they would have paid in drug expenses in 2006, and therefore states could experience savings of 10% from their current prescription drug spending levels for dual eligibles (California Healthline, 7/8).

However, many governors said their states ultimately will pay more for dual eligibles' drugs under the new law. Virginia Gov. Mark Warner (D), the outgoing NGA chair, said, "This is coming down the pike at us real quick," adding, "In January, it's going to be on our doorstep." Michigan Gov. Jennifer Granholm (D) said, "We're all talking to our attorneys general and contemplating a suit." She added, "There are about 17 governors who are exploring all possible options" (AP/Long Island Newsday, 7/18).

In related news, Arkansas Gov. Mike Huckabee (R) on Monday is scheduled to be named chair of NGA. Huckabee has served as vice chair for the past year. Huckabee has "indicated that his one-year term ... will focus on making the nation's health better, with a heavy emphasis on placing more responsibility on individuals," the Democrat-Gazette reports (Arkansas Democrat-Gazette, 7/18).