Governors Pressed for Solutions to Medicaid

Governors convening for the annual winter meeting of the National Governors Association (NGA) are to go to the White House today to make their case that states need less red tape and interference from Washington but not less federal money to meet the growing demands of health care for the poor.

U.S. Health and Human Services Secretary Michael Leavitt briefed the Republicans Governors Association (RGA) Saturday (Feb. 26) and encouraged states to come to an agreement on ways to reform Medicaid, the state-federal health care program for 52 million poor and disabled Americans

RGA Chairman Kenny Guinn of Nevada told Stateline.org that the hope is to carry “a coordinated message from all governors” to President Bush but said it was too early to provide details.

Health care, education and an overhaul of outdated communications laws rank as the top issues on the agenda of the NGA meeting, which runs through March 1, but Medicaid is likely to spark the most contentious debates.

Governors are expected to urge top administration and congressional leaders to abandon Bush’s bid to save $40 billion in part by closing loopholes that states exploit to get more federal matching funds for Medicaid.

The meeting comes as states and Congress are working on their respective fiscal 2006 budgets. States just now are recovering from four years of tight budgets triggered by the 2001 national recession, while the federal government faces an estimated $427 billion deficit brought on by U.S. spending for wars in Iraq and Afghanistan and tax cuts.

“We have to get control of spending [for Medicaid]. … It’s unsustainable,” Mississippi Gov. Haley Barbour (R) told reporters following RGA’s private meeting with Leavitt.

States are exhausted by the growth in Medicaid spending and are looking for new ways to save both states and the federal government money, Raymond Scheppach, NGA’s executive director, said at a recent health care forum on the Bush administration’s budget proposal. “Withdrawing that $40 billion from the [state-administered Medicaid] system would require cuts in other programs or tax increases,” he said.

On the flip side, Scheppach said the president’s proposals to provide $4 billion to states to help low-income people purchase health insurance along with $74 billion for health insurance tax credits “could be very, very big pluses,” depending on how the programs are structured.

In the president’s budget, Bush promised to work with Congress to reform Medicaid, which is a major squeeze on state budgets. For their part, the governors have been working since January on the Medicaid question, hoping to come up with bipartisan proposals on which Congress and the White House can agree.

Vermont Gov. Jim Douglas (R) said Leavitt “clearly wants to work with his former colleagues to help us with this dilemma.” Leavitt was governor of Utah when the president picked him to head the U.S. Department of Health and Human Services.

“The key point is that we have the same problem and the same goal. The federal government has a deficit, and most states are feeling squeezed,” Douglas said at the RGA media briefing. Some 24 percent of most state general funds go to Medicaid, he said. It’s even higher in Vermont, hitting just shy of 30 percent, Douglas said.

Similar comments came from Democrats. “The federal cuts in Medicaid have caused us to make significant cuts in almost every aspect of our budget to realign and reshape benefits we offer in our Medicaid program.” Pennsylvania Gov. Ed Rendell (D) told Stateline.org in between sessions at the weekend NGA Education Summit.

Rendell noted that other states are either reducing Medicaid benefits or cutting their Medicaid rolls, such as Tennessee’s decision to drop 323,000 adults and Mississippi’s cut of 50,000 from Medicaid coverage. In some instance, Rendell said, states are raising taxes, pointing to Indiana where the Republican governor is Mitch Daniels, President Bush’s former budget director. Rendell described Daniels as anti-tax, who has been forced to raise taxes.

The governors will have a two-and-a-half hour meeting with the president and top advisers this morning. In addition to Leavitt, another former colleague will be on hand: Mike Johanns, who was Nebraska’s governor until confirmed this year to be U.S. agriculture secretary. Michael Chertoff, the new secretary of homeland security, and White House Chief of Staff Andy Card also are slated to attend the White House meeting.

The governors are to end their conference March 1 with more discussions on health care. On Tuesday, HHS’s Leavitt is to join in a panel session on how to lower cost and improve the quality of health care. As governor, Leavitt made his mark by revamping his state’s Medicaid program in a way that gives basic coverage to more poor people but requires others to make co-payments for certain service. Utah needed the federal government’s blessing before it could act.

Several states are working on major Medicaid overhauls of their own that likewise would need federal approval. The moves are prompted in large part by the double-digit increases in Medicaid state spending. Florida Gov. Jeb Bush (R), for example, wants to give vouchers to Medicaid recipients to cover health care needs. Georgia is among 21 states that want to give money directly to poor elderly and disabled people so they can hire caregivers directly rather than have the state choose who bathes, feeds and dresses them. States must get waivers from the federal government to try these ideas, but it can be a lengthy bureaucratic process.

The NGA kicked off its annual winter meeting Saturday, Feb. 26, with a two-day education summit on high schools. A coalition of 13 governors pledged to aggressively raise the academic bar in their high schools and better prepare students for college and the workforce. And to ignite reform quickly, six nonprofit foundations pledged $23 million in matching grants for states that take up the challenge.

Governors and President Bush are in sync in focusing on high schools as the nation’s next big education challenge. However, several governors carry to the White House strong reservations about the president’s landmark No Child Left Behind law, which increases federal oversight of how states manage elementary schools. During the weekend’s education summit, the governors heard from Margaret Spellings, the new U.S. Department of Education secretary, but grievances over the education law weren’t publicly aired.

Just a few days before the NGA meeting, a bipartisan group representing 50 state legislatures called for major changes in the education law, including giving states more flexibility to meet some of the law’s requirements and waivers for state’s own testing programs already in place.

During the NGA meeting, governors also will continue their talks with industry officials on ways to revamp outdated telecommunications tax laws. As more people go online to make phone calls, states worry they will be cut off from regulating or taxing the next generation of phone calls and other telecommunication services.

A handful of governors will miss this year’s NGA winter meeting. Rhode Island Gov. Donald L. Carcieri had planned to attend but is staying home to be with his wife, who is recovering from quadruple bypass surgery. Maine’s Gov. John Baldacci (D) also planned to attend, but re-injured one of the ribs he broke earlier this month after slipping on ice.

California Gov. Arnold Schwarzenegger, who was in the nation’s capital Feb. 17 stumping for more federal funds for his state, also will miss the meeting. Other no-shows are Connecticut Gov. M. Jodi Rell, Florida Gov. Jeb Bush, Maryland Gov. Robert Ehrlich and Missouri Gov. Matt Blunt. Staff said their bosses were staying in the state capitals to work on key legislation or budgets.