NYT Story: Governors Offer 'Radical' Revision of Medicaid Plan

[James Levy]

A disturbing solution, in my opinion...

James R. Levy, J.D.
Research Associate
Center for Technology and Disability Studies
University of Washington
email:    jrlevy at u.washington.edu

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Governors Offer 'Radical' Revision of Medicaid Plan

February 26, 2001
By ROBERT PEAR (New York Times)

WASHINGTON, Feb. 25 — The National Governors' Association is
proposing radical changes in Medicaid that would allow states to
provide health insurance to millions of additional people, but the
benefits would be less generous than those now guaranteed to poor
people.

 Gov. Parris N. Glendening of Maryland, a Democrat who is chairman
of the association, said today that the new approach was needed
because "health care costs are rising at the same time tax revenues
are declining in many states," and yet many governors want to help
provide coverage to people who are uninsured.

 The governor of Utah, Michael O. Leavitt, a Republican, said, "The
goal is simple: to provide some access to basic health care for
everyone, rather than a rich plan of health benefits for just a
small group of people."

 The new policy, drafted by governors of both parties who are here
for the 93rd annual meeting of the association, would still
guarantee a comprehensive package of benefits for the poorest
families, thus "maintaining the health care safety net for
vulnerable populations."

 But the draft policy statement says "the current all-or-nothing
structure of the Medicaid program" must be changed so states can
offer a more modest package of benefits to people with higher
incomes.

 "States should have more flexibility with optional benefits and
optional populations," the statement says.

 The policy was approved today by the association's Committee on
Human Resources. A number of governors said they expected the full
organization to endorse it on Tuesday.

 The 1996 welfare law, which has helped millions of Americans move
from welfare to work, resulted directly from policies advocated by
the governors' association. Governors said they hoped their new
health policy would provide a similar blueprint for Congressional
action on Medicaid. They will use it as a basis for discussions
with Congress and the Bush administration this spring.

 Gov. Howard Dean of Vermont, a Democrat who helped write the new
policy, said it expressed the governors' desire for "a radical
restructuring of Medicaid."

 The governor of Tennessee, Don Sundquist, a Republican, said
Republicans liked the policy because it would allow states to
combine Medicaid with private health insurance. Under the proposal,
states could use Medicaid money "to pay for part of the employee
share of premiums" under employer-sponsored health plans.

 While it is too early to expect a detailed federal response,
comments today by Tommy G. Thompson, the secretary of health and
human services, suggest that he supports the governors' request for
more freedom in operating Medicaid.

 In a speech to the governors, Mr. Thompson announced a 60-day
delay in new federal rules defining the rights of Medicaid
recipients in health maintenance organizations and other forms of
managed care. The rules, published by President Bill Clinton on
Jan. 19, were to take effect on April 19. Mr. Thompson, who was
governor of Wisconsin for 14 years, said it was "not realistic to
expect the states to renegotiate their managed care contracts and
come into compliance" so quickly.

 Secretary Thompson announced a similar delay in rules for another
federal program, the Children's Health Insurance Program.

 The governors' plea for more flexibility in Medicaid grows out of
years of frustration with the program, which provides health
insurance to 35 million people at a cost of more than $200 billion
a year to the states and the federal government. Medicaid spending
rose 9 percent last year, the largest increase in seven years.

 Governor Dean of Vermont said he would like to use the new
flexibility to cover adults with incomes exceeding 1.5 times the
official poverty level — a figure that amounts to $21,945 a year
for a family of three.

 Medicaid began in 1965 as a health program for the poorest of the
poor. But governors said that if the program was expanded to cover
people with higher incomes, there would be less need to provide
such comprehensive benefits.

 Some advocates for the poor are receptive to this argument and
acknowledge that many states have made aggressive efforts to expand
coverage. But the advocates say that people who are poor or
disabled must be completely protected against the loss of health
benefits.

 Medicaid benefits are more generous than those offered by most
private employers and by state governments to their own employees.

 Governor Leavitt of Utah said: "We could cover 40 percent more
children if we could design a health insurance program that matched
the state employees' program, as an alternative to Medicaid. We
would provide people with the same benefits as the governor's
kids."

 Even as governors drafted their policy, they heard from Bush
administration officials promising to be more attentive and
responsive to the states.

 At the same time, administration officials appealed to governors
to support the policies that President Bush will unveil in a speech
on Tuesday to a joint session of Congress.

 Andrew H. Card Jr., the White House chief of staff, asked for
support of the president's proposal to cut taxes by $1.6 trillion
over 10 years.

 Roderick R. Paige, the secretary of education, defended Mr. Bush's
call for annual state assessments of performance in reading and
mathematics by all children from the third grade through the eighth
grade. Some governors have expressed reservations about details of
the proposal, fearing that a federal mandate for more testing could
impose new costs on the states and might create pressure for a
uniform national curriculum.

 Under Mr. Bush's proposal, each state would choose the tests to be
used in its annual assessments of reading and math. But, as a
condition of receiving federal money, states would have to evaluate
a sample of students with tests known as the National Assessment of
Educational Progress.

 The governors' association said its members "support the annual
assessment of students in reading and math in grades three through
eight." But it said that states should be able to satisfy any
federal requirements with "a combination of state and local
testing."

 The governors also said the government should pay the full cost of
administering the National Assessment of Educational Progress.

 The governors attended a dinner with Mr. Bush at the White House
tonight. The president is scheduled to attend a working meeting
with the governors' association on Monday.

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