Governors assess Medicaid fixes

The nation's governors, weighing what to tell Congress they want from Medicaid reform, may take aim at the common practice of seniors giving away their assets so the government pays for nursing home care. They could also demand that the poor pay a share -- or a greater share -- of their health-care bills.

Those proposals, along with more consumer-friendly recommendations like tax credits for long-term care insurance, are being circulated among the governors in a 12-page document -- a working draft of a statement that could be taken to Congress and the Bush administration. The idea is that the governors would have a united position in the debate over how to rein in soaring costs of the state-federal health-care program for the poor.

Governors have not yet agreed on the recommendations and it's unclear yet whether a majority will, according to interviews with governors, state Medicaid officials, aides and health-care professionals who have been involved or apprised of the discussions and seen the draft document.

Governors involved emphasize they hope to balance money-savings through efficiencies like electronic medical records and state purchasing pools with other changes that would add costs to Medicaid beneficiaries or providers, or deny some people services.

Reaching agreement has been elusive. The talks began in January, before President Bush proposed cutting Medicaid spending growth by an estimated $40 billion over 10 years. Governors united to oppose cuts, but they haven't publicly gone farther on other ways to save money.

"We're three steps forward and four steps back," said Arkansas Gov. Mike Huckabee, a Republican who, along with Democrat Mark Warner of Virginia, is leading the effort.

The basic problem, he said, is that every tweak in Medicaid would have a different effect in each state, causing more pain for some than others.

The House budget would cut $20 billion over five years; the Senate refused any cuts but called for a study commission. Governors hope to take part in the federal debate but are leery of proposing changes that might be used to simply save dollars rather than improve the system.

"There's deep concern that Congress and the administration will come up with a number that they should save, and it will drive policy. And it should be the other way around," said Iowa Gov. Tom Vilsack, a Democrat who said Medicaid -- and not Social Security -- is the most pressing issue right now.

"You can add a few bucks to my Social Security check and I'll be pleased as punch," he said. "But if I can't afford health care, what good is it going to do?"

Medicaid has grown faster than inflation and is estimated to cost over $300 billion in total this year. The program will serve roughly 53 million people.

Medicaid now pays for two of every three nursing home patients in the country. It pays for one out of three births. It has become the leading payer of mental health services, and the leading payer of services for people with HIV and AIDS. One out of nine people in the country are on Medicaid.

In Congress, some who argue for a larger reappraisal of the program said the governors' recommendations may be critical.

"We need to get some big ideas on Medicaid," said Rep. Heather Wilson, R-N.M., who authored a letter in the House that won support from 44 GOP members seeking a study commission on Medicaid rather than the cuts in the House budget plan.

Warner and several governors would not make their document public but discussed the ideas in general, while aides and others involved in health care, who asked to remain anonymous because the draft is still in play, described the proposals in more detail. They include:

* Adding deductibles or co-pays for medical care for Medicaid recipients, forcing patients to share costs and discouraging misuse of the system.

* Making it more difficult for senior citizens to transfer their assets to relatives or others so that they fall within Medicaid eligibility requirements and the program would then pay for a nursing home. One proposal would allow states to examine a person's finances at greater depth in the interest of seeking repayment for government-provided care.

* Trying to find ways to discourage businesses from dropping health insurance or otherwise shifting employees to Medicaid, possibly through tax credits.