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[tvoivozhd <tvoivozd AT infionline.net>]

	The Christian Science Monitor - csmonitor.com 
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ttvoivohd---I guess dumping  Medicaid costs on the States is solving the 
Medicaid problem---by Bush standards

from the February 04, 2005 edition - 
http://www.csmonitor.com/2005/0204/p02s02-uspo.html


   Debate grows over who owns Medicaid costs

*President Bush is expected to announce trims in healthcare spending, 
placing the burden back on fiscally strapped states.*

*By Alexandra Marks 
<http://www.csmonitor.com/cgi-bin/encryptmail.pl?ID=C1ECE5F8E1EEE4F2E1A0CDE1F2EBF3>* 
| Staff writer of The Christian Science Monitor

*NEW YORK* - As President Bush prepares to present his budget next 
Monday, the nation's governors have put him on notice: Don't try to 
balance it on our backs.

Their top concern is Medicaid - the $300 billion healthcare program that 
provides coverage for the disabled, 70 percent of the elderly in nursing 
homes, and low-income people.

Its costs are spiraling upward, draining state coffers as well as the 
federal treasury. The primary reason is that as more people lose private 
insurance, they end up in the Medicaid safety net. Over the past four 
years, the Medicaid rolls have jumped more than 30 percent. Combine that 
with the growing number of elderly in nursing homes, and you get a 
runaway fiscal train that both the states and federal governments agree 
has to be stopped. But there's a major fight brewing over how to do it.

On Monday, President Bush is expected to propose limiting the federal 
government's share of the Medicaid bill - perhaps cutting as much as $50 
billion over five years. Federal spending on the program is now $180 
billion a year. He'd do it by capping the federal allotment in exchange 
for giving states more flexibility in running their programs.

Many governors say that's no solution, since it primarily shifts the 
financial burden onto the states, most of which are struggling to keep 
their Medicaid costs in check. In the past year, all 50 states have cut 
benefits, restricted eligibility, or increased co-pays to keep the 
program's spending manageable. Some states, like Tennessee are simply 
cutting large numbers of people from the program.

Other states are experimenting with different ways to rein in spending. 
In Florida, for example, Gov. Jeb Bush is proposing essentially 
privatizing much of Medicaid by contracting private health organizations 
to provide services.

"We could well be on a collision course where state revenues are not 
expanding enough to meet the needs of the program at the same time the 
federal contributions are being cut back," says Diane Rowland, executive 
director of the Kaiser Commission on Medicaid and the Uninsured. "The 
end result will be fewer people or services covered. There's no safety 
net below Medicaid."

In what could be seen as a preemptive warning to the administration, the 
National Governors Association sent a letter to congressional leaders 
last month letting them know that reforming Medicaid is their highest 
priority this year. But it also urged them to reject any proposed reform 
that just shifts "additional costs to states." The $120 billion states 
spend annually on Medicaid is already more than they spend for K-12 
education. It now accounts for an average of 22 percent of state budgets.

But the Bush administration is taking a hard line. This week the new 
secretary of Health and Human Services Mike Leavitt charged that some 
states use "loopholes" and "gimmicks" essentially to get the federal 
government to pay a larger share of the program than it should.

In a speech to the World Health Congress on Tuesday, he called them the 
"seven harmful habits of highly desperate states." They include such 
things as overpaying providers, charging the federal government for the 
overpayment, and then having it returned to them so they can spend it 
for other purposes. For their part, the states argue that overall the 
program is already extremely efficient compared to other healthcare 
programs. While private health-insurance premiums went up more than 12 
percent, Medicaid's annual spending per capita was up only 4.5 percent.

"We can't just shift all of the risks downstream to the states while the 
feds limit their exposure year to year," says Ken Thorpe, a professor of 
health policy at Emory University in Atlanta.

Indeed, many states say the problem is not the way the program is 
structured. It's that the states have become the de facto underwriter 
for nursing home care. While the elderly and nursing home residents make 
up only 6.5 million of the 50 million people Medicaid serves, they 
account for 42 percent of the program's $300 billion annual price tag. 
Some states believe the federal government has a responsibility to find 
another way to fund their care. The Bush administration argues that its 
proposal would would also allow for other types of experimentation.

Full HTML version of this story which may include photos, graphics, and 
related links <http://www.csmonitor.com/2005/0204/p02s02-uspo.html>

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