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Governors meet on Medicaid, Medicare

DES MOINES, Iowa - Governors came together Sunday on sweeping Medicaid changes that could help President Bush's budget goals, even as more than a dozen of the chief executives are weighing a legal fight over a new Medicare policy that will cost states hundreds of millions of dollars.

The focus at the governors' summer meeting on the two huge, government-paid health care programs - Medicare for the elderly, Medicaid for the poor - underscored their widespread view that health care is their most urgent issue, for constituents and for states' financial future.

"This is coming down the pike at us real quick," Democrat Mark Warner of Virginia said about the complex new policy changes, which governors say will unfairly force them to pay part of Bush's new prescription drug benefit. "In January it's going to be on our doorstep."

Governors on Sunday also stepped up their campaign to improve high school education, agreeing to standardize the way they track graduation rates.

Their concerns about Medicare centered on a relatively small portion of Bush's huge new drug prescription policy that would affect elderly who are poor enough to qualify for Medicaid and old enough to qualify for Medicare.

Governors have long argued that the federal government should pay the costs of that group, which are significantly higher per person than for the rest of the Medicaid population.

The new Medicare law takes over paying for those drugs, but requires states to pay the federal government for the overwhelming majority of the bill. Many governors said the complex and cumbersome federal formula means they would pay more money than before, and that state cost-savings were being ignored.

"We're all talking to our attorneys general and contemplating a suit," said Democrat Jennifer Granholm of Michigan. "There are about 17 governors who are exploring all possible options."

Governors met privately Sunday with Sen. Charles Grassley, the Iowa Republican who chairs the Senate Finance Committee that is considering Bush's budget goal of reducing the growth of Medicaid by $10-billion over the next five years.

Governors said they all support a proposal to alter Medicaid in hopes of slowing its growing cost and to give states the chance to experiment with more effective ways to deliver health care.

An Iowa experiment, for example, aims to encourage preventive care by using copays to encourage people to make healthier choices. Patients would skip a copay if they quit smoking, or lose weight. Those who don't follow through would be required to pay.

If accepted in Washington, the governors' plan would allow states to demand copayments from the poor, disabled and women with children, and add tools to curb seniors from giving relatives their assets so they could get Medicaid-funded long-term care.

Worries from health care advocates have some governors, particularly Democrats, warning that opening the door to copays must be accompanied by limits that don't drive the poorest recipients off government-provided health insurance.

Some governors said that, regardless of what the governors' association or Congress agrees upon, they won't pursue copays or targeting seniors.

"There's a moral component to a budget. What do those numbers do, how do they help people?" said Illinois Democrat Rod Blagojevich, who did not attend the convention. He said he likes the flexibility the NGA plan proposes, but not raising costs for poor and working families.

[Last modified July 18, 2005, 01:38:10]