[Mb-civic] Medicaid Cutbacks Divide Democrats - Washington Post

[William Swiggard]

Medicaid Cutbacks Divide Democrats
House Condemns Provisions Crafted By Governors

By Jonathan Weisman
Washington Post Staff Writer
Monday, November 28, 2005; A01

Controversial House legislation designed to gain control of Medicaid 
growth has split Democrats, with lawmakers in Washington united in their 
opposition while Democratic governors are quietly supporting the 
provisions and questioning the party's reflexive denunciations.

The Medicaid provisions have become a flashpoint for the opposition of 
Democrats -- and some moderate Republicans -- to the $50 billion 
budget-cutting bill that narrowly passed the House last week. The 
provisions would reduce Medicaid spending by $12 billion through 2010 
and $48 billion over the next decade, in part by making it difficult for 
more affluent seniors to transfer their assets to relatives, then plead 
poverty to get Medicaid to pay for them to stay in nursing homes.

But the measures would also save $2.4 billion over five years by 
allowing state governments to impose higher health insurance 
deductibles, co-payments and premiums on poor Medicaid recipients, 
including, for the first time, impoverished children and pregnant women. 
An additional $3.9 billion would be saved by relaxing mandated 
preventive health care and screening of children and pregnant women.

The changes would trim just 1.7 percent from a program expected to spend 
nearly $2.8 trillion though 2015, but the proposals have prompted bitter 
condemnation from congressional Democrats.

"As the number of people without health insurance has increased for four 
years in a row, Republicans are charging ahead with $45 billion in cuts 
to Medicaid -- the health insurance program that provides medical care 
to America's poorest children and many of the survivors of Hurricane 
Katrina," House Minority Leader Nancy Pelosi (D-Calif.) thundered Nov. 
18, just before the pre-dawn passage of the bill. "Republicans give new 
meaning to the words 'suffer little children.' "

What she did not say is that those changes were proposed over the summer 
by a bipartisan task force of governors, led by Virginia's Mark R. 
Warner, whose popularity in a Republican state has made him a rising 
star in the Democratic Party.

In fact, the most controversial provisions in the House bill were 
adapted almost word for word from a document drafted by Govs. Warner, 
Tom Vilsack (D-Iowa), Haley Barbour (R-Miss.), Janet Napolitano 
(D-Ariz.), Mike Huckabee (R-Ark.), Jennifer M. Granholm (D-Mich.), Dirk 
Kempthorne (R-Idaho), Jim Doyle (D-Wis.), Mike Rounds (R-S.D.), and 
Edward G. Rendell (D-Pa.), said Ray Scheppach, executive director of the 
National Governors Association.

"The House has worked very closely with us," Scheppach said. "From our 
standpoint, Republicans and Democrats saw this very similarly at the 
state level."

The split has underscored the differing interests of Democrats in 
Washington -- out of power and struggling to capitalize on the declining 
popularity of their adversaries -- and Democratic governors, who take a 
more pragmatic approach. For governors, the soaring costs of Medicaid 
threaten to swamp state financing. Already, tens of thousands of people 
have been thrown off the Medicaid rolls in states such as Tennessee and 
Missouri, and governors have warned that those cuts will grow deeper if 
they do not have the flexibility to trim benefits more rationally.

So where Washington Democrats hope to highlight the partisan divide, 
their gubernatorial counterparts outside the Beltway have emphasized 
pragmatism and moderation, not only in the way they have governed but in 
their political campaigns.

That split -- over policy and style -- could come increasingly into 
focus as potential presidential contenders outside Washington, such as 
Warner, clash with congressional contenders, such as Sen. Hillary Rodham 
Clinton (D-N.Y.), as they jockey for position ahead of the 2008 White 
House race.

For now, Democratic governors have been willing to voice their 
opposition to the broader budget-cutting bill, attacking provisions that 
cut child support enforcement, narrow eligibility for foster care and 
adoption assistance, and impose stricter work requirements on welfare 
recipients with only modest increases in child care assistance.

"The president and his friends on Capitol Hill have put together a 
budget that does not reflect the values of everyday Americans," said New 
Mexico Gov. Bill Richardson, chairman of the Democratic Governors 
Association.

But they have conspicuously steered clear of the Medicaid debate that 
will continue to rage into next month, as House negotiators push their 
Medicaid provisions in conference with a wary Senate.

Thomas S. Kahn, the Democratic staff director of the House Budget 
Committee, said Democrats are unified on one point: Savings from changes 
to the Medicaid system should be used to strengthen health care for the 
poor, not pay for tax cut extensions that congressional Republicans hope 
to pass when they return in December.

"All Democrats agree strongly that cuts in Medicaid, especially those 
that hurt poor beneficiaries, should not be used to pay for tax cuts, 
especially those geared toward those at the top," Kahn said.

And gubernatorial support for the Medicaid changes may not be universal. 
In an Aug. 31 letter, Gov. Ted Kulongoski of Oregon implored Sen. Gordon 
Smith (R-Ore.) to oppose increased cost-sharing, especially for Medicaid 
recipients below the poverty line.

But Kahn and liberal activists acknowledged the fissure with governors 
is real.

The division stems in part from long-standing fears that if Washington 
gives states too much latitude over federal programs, some governors 
will go too far. Under the House bill, the $3 co-payment for Medicaid 
recipients below the poverty level would be allowed to rise annually 
with the medical inflation rate. For the first time, states would be 
allowed to refuse care for patients who refuse to pay.

States would also be allowed to charge co-payments, premiums or 
deductibles for visits to hospital emergency rooms for non-emergency 
care and for expensive prescription drugs not on a list of preferred 
medications.

What really worries liberal policy groups is a measure allowing states 
to impose any co-payment they want on Medicaid recipients who are above 
the poverty line, typically the working poor. Those fees are supposed to 
remain below 5 percent of beneficiaries' total incomes, but policy 
experts say that cap will be impossible to enforce. Most working poor 
will not be able to track their annual medical expenses to that degree 
of specificity.

The nonpartisan Congressional Budget Office estimated that by 2015, 11 
million Medicaid beneficiaries -- half of them children -- will face 
fees they do not face today. About 80 percent of the cost savings from 
the bill would come not from the premiums and co-payments but from poor 
people no longer seeking medical attention.

Scheppach allowed that experiences do indicate higher fees might keep 
some people from seeking needed health care. But, he said, Congress 
should trust the governors to use the proposed changes wisely.

"We think governors are going to use these measures in a positive way, 
steering people away from emergency to non-emergency care or getting 
them drugs that are more affordable," he said, adding that if nothing is 
done about Medicaid costs, even more people will be cut from the 
Medicaid rolls entirely. "These are good policies for the long run."

http://www.washingtonpost.com/wp-dyn/content/article/2005/11/27/AR2005112700781.html?nav=hcmodule
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