WASHINGTON, June 15 (UPI) -- The nation's governors have presented a solid, bipartisan front for Medicaid reform that should push Congress, which is trying to cut $10 billion from the large healthcare entitlement, to give states more flexibility in how they run their programs.
Republicans in Congress pushed through Medicaid cuts, but Democrats are strongly opposed and want to strengthen the federal role in the entitlement program for the indigent. The idea Congress could give the states something all governors agree they want could help smooth over the reductions.
Wednesday, Govs. Mark Warner, D-Va., chairman of the National Governors Association, and Mike Huckabee, R-Ark., pitched some of the group's ideas to the Senate Finance Committee. Only those issues on which the governors had attained full bipartisan support were presented and Warner called the proposals a first draft, not a finished product.
"As the nation's governors, we have come together," Warner said.
Huckabee added it was "difficult to tell who were the Republicans and who were the Democrats in the (NGA) discussion."
The items the governors want -- things they think will save money, allow for more efficient program operation, and potentially allow more people to be covered -- include:
--more power to negotiate drug discounts with the pharmaceutical industry;
--changes in the asset dumping policy to discourage seniors from giving their assets to their children to meet the financial qualifications for Medicaid coverage of long-term care;
--permission to modify cost sharing rules so everyone receiving a Medicaid benefit pays at least a small co-payment or deductible, based on financial ability to pay;
--more flexibility and less difficult waiver policies so each state can structure its coverage parameters to fit the needs of its population, and
--judicial reform so each time a state changes coverage parameters for optional populations it is not sued by advocacy groups that disagree with the decision.
Medicaid, at more than $300 billion in combined state and federal spending this year, makes up an average of 22 percent of state budgets -- a larger share than education in many cases. By 2015, program expenditures will have tripled what they were in 1998.
The governors have agreed what they want in terms of Medicaid reform, but they also know what they do not want -- proposals favored by Republicans and the White House.
"We don't, by any means, favor moving Medicaid to block grants, we don't favor (spending) caps," Warner said, "but ... we're getting hit with a triple whammy."
That trio comprises states assuming more costs formerly paid by the federal government, employers dropping health benefits for employees, and the aging U.S. population. "We can't absorb all three of them," Warner said.
"At the end of the day, it's going to take a bipartisan approach to get this done," said Sen. Gordon Smith, R-Ore.
It quickly became apparent what a difficult challenge that is for Congress as Finance Democrats began to pick apart the governors' proposals and test the waters with their own proposals.
Sen. John Kerry, D-Mass., said the governors' plans, taken as a whole, "are not going to cure the problem." He instead suggested a plan, in which the federal government would pay for all Medicaid services for people earning under 100 percent of the federal poverty line. In exchange, states would expand programs to help the low-income working poor by increasing services to people in the 200 percent to 300 percent of poverty range.
Huckabee said such a proposal would "have a receptive audience" among governors as long as the plan also dealt with long-term care and judicial reform. "This is a starting place, not a finish line," he added.
Sen. Ron Wyden, R-Ore., pitched his bill, which would change how the pharmaceutical industry reimburses Medicaid in its established discount program to allow states to get better rebates. Wyden wants to reduce the impact of direct-to-consumer advertising, which he said increases utilization of expensive drugs even when cheaper alternatives are available.
Warner said at first blush the bill makes sense as long as there was a way to determine pharmaceutical advertising expenditures from research and development and other costs.
What likely came closest to what the governors want is a bill introduced Tuesday by Sens. Grassley and Blanche Lincoln, D-Ark. It would provide tax credits and tax deductions for people who purchase long-term care insurance or who provide home care for loved ones.
"Long-term care is the biggest cost driver in the Medicaid problem," Warner said.
The governors support tax credits and deductions but also want to use reverse mortgages as a way for seniors to have money to pay for long-term care. The governors want seniors to be able to keep some portion of their assets and still qualify for Medicaid, eliminating the asset dumping problem.
Lincoln questioned the advisability of implementing even a nominal co-pay for Medicaid beneficiaries, and noted studies show even small fees cause people to shun the system. That could end up in more Medicaid spending as people who do not access care or fail to take medications end up with more hospitalizations and increased healthcare costs.
While the governors said their research showed nominal payments helped Medicaid beneficiaries feel like they were contributing to their healthcare, the co-pays and deductibles could be one of the biggest stumbling blocks for the states.
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