On the last day of the National Governor's Association conference, the states' chief executives tackled a tough issue -- Medicaid. The program originally put in place to help poor women and children has ballooned to serve the needs of a growing population of elderly and disabled people. Governors were taken by surprise earlier this week when they heard what they took as a threat from the white House – come up with a plan to reform Medicaid in a matter of weeks, or face a cut of 60 billion dollars.
But after meeting with Secretary of Health and Human Services Mike Leavitt, the governors see more room for negotiation. NHPR correspondent Julie Donnelly reports from Washington.
The Governors left Washington with no consensus on Medicaid and no clear assurances from the White House that the plight of the governors will prevent large cuts.
But New Hampshire Governor John Lynch did see the meeting in a positive light.
He says there will be no ultimatum from the Bush administration to come up with a plan in the next few weeks – or else.
“There's no deadline, there's no timetable that's being imposed on us. There is no deadline that we have to respond to in order to have our proposal weighed properly or even possibly accepted”
Governor Lynch's interpretation of the meeting with Secretary Leavitt fits well with his long held views on Medicaid. Lynch has said before that he does not want to rush into making changes to Medicaid - and sees no reason to do so.
But Lynch and the other Governors did get some bad news from the HHS Secretary . The states had hoped that if big Medicaid cuts are in the pipeline, that the Bush administration would offer the states some up-front money to reform the system. Those funds would be used to expand home based health care and other more affordable alternatives to long-term care.
“I think there has been a perception, among some, that the right proposal in fact would receive some up front money, but Secretary Leavitt told me that's not the case so we have to proceed on the assumption that that money is not available”
The likelihood of extra help from Washington is a matter of dispute between Lynch and New Hampshire HHS Commissioner John Stephen. Stephen insists that the federal officials he's been talking to are much more encouraging.
"They've made it clear form the beginning that any change would have to be budget neutral but they've made it clear that they would be willing to help the state of NH to find additional funding opportunities that we are not taking advantage of today."
Still, the White House goal of cost reduction is real, and New Hampshire Senator Judd Gregg, Chairman of the Senate Budget Committee, has driven this point home on numerous occasions.
“The biggest spending in the federal government of course involves entitlement spending which is the fastest growing part of the federal spending programs. It's about 54% right now, it's projected to go up to to 61% over the next few years. So my goal is to address those entitlement accounts.”
A political collision on Medicaid spending seems likely. On the one side will be the governors, who will have to face hundreds of Medicaid recipients at the state house door. On the other will be the Bush Administration and his Republican allies, who have promised to cut the deficit in half in the next four years.
But Governor Lynch is optimistic that federal and state officials can find a mutually agreeable solution, if they just focus on what's important - people.
"Well, I think even Senator Gregg would agree that what we need to do with regard to medicaid changes is first protect our medicaid population. That nobody wants to see us put into place reforms that disenfranchise the population currently depending on medicaid for their own needs."
While the Governors were relieved that the pressure was off them to make a snap decision on Medicaid - they now might face a tougher task - a long wait. Secretary of Health and Human Services Mike Leavitt says in will be June before the federal proposal on Medicaid firms up. That's a long time for the states to wait to learn what cuts are expected on their end.
For NHPR News, I'm JD in DC
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