THIS IS TOUGH!  GOP had better watch their sixes, else Medicaid will bite
them on their arses.   This is exactly what I was worried about.

Mike



  _____


Sent: Sunday, December 12, 2004 9:52 AM
To: [log in to unmask]
Subject: [VAWAIVERS-L] Medicaid cuts 'on the table' for 2005



Medicaid cuts 'on the table' for 2005
GOP deficit cutters target huge health care program for the poor.
By Lawrence M. O'Rourke -- Bee Washington Bureau
Published 2:15 am PST Saturday, December 11, 2004
WASHINGTON - Medicaid, the nation's health care program for the poor,
appears
headed for the chopping block in 2005 as President Bush and Congress look
for
ways to cut the federal budget deficit.
Strengthened by the election, the Republican majority on Capitol Hill looks
ready to join Bush in putting a lid on federal Medicaid spending, according
to
members of Congress and state officials.
Medicaid is being targeted because it has become the largest government
health care program, costing federal and state governments about $300
billion a
year, more than Medicare. Medicaid funds about 17 percent of U.S. spending
on
hospital care.
The program serves about 53 million people. It pays for nearly half of all
nursing home care in the United States. It pays health-care costs of one in
four
U.S. children and more than 40 percent of the cost of caring for children in
hospitals, according to Peters Willson, vice president of the National
Association of Children's Hospitals.
Medicaid also pays for more than one-third of all births in the United
States.
"Republicans are real sincere about cutting the budget, and that makes
Medicaid vulnerable," said California Rep. George Radanovich, R-Mariposa, a
member
of the Energy and Commerce Committee, where Medicaid legislation starts. The
program is known as Medi-Cal in California.
Many congressional Republicans want to get to a balanced federal budget even
faster than Bush, who has promised to cut the deficit in half over the next
five years, Radanovich said.
"The big entitlements, including Medicaid, are on the table," he said.

Another Californian, Rep. Anna Eshoo, D-Atherton, who also is a member of
the
Energy and Commerce Committee and sits on its health subcommittee, agreed.
"Medicaid could be on the table next year, including cuts in program
services," she said. "The president has already proposed turning the program
into a
block grant and eliminating the intergovernmental transfer program that is
so
vital for hospitals serving low-income individuals and families in
California. I
will oppose this."
Cutting health care programs is a tough go on Capitol Hill. Americans, while
supporting deficit reduction, are overwhelmingly against targeting Medicaid
for big cuts, said Linda DiVall, a GOP pollster.
When asked where Congress should cut spending, survey respondents start with
trimming the tax cuts enacted by Republicans during the first Bush term, and
follow with cuts in foreign aid, corporate tax breaks, the war in Iraq and
welfare, DiVall said.
"Medicaid, Social Security and Medicare are the untouchables," she said.
But Medicaid cuts have to be put into the mix if the Republicans are to
accomplish other 2005 goals announced by Bush, budget analysts contend.
State
government officials say they are bracing for a bruising battle over
Medicaid in
2005.
Congress will have many high-ticket items on its agenda next year. Bush has
called for an overhaul of the tax code that almost certainly would result in
lost revenue. Bush wants to revamp Social Security, a process that could
force
the federal government to borrow up to $2 trillion to fill the gap between
lost
tax revenue and the benefits promised taxpayers 55 and older.
The size and timing of Medicaid reductions have not been set, administration
and GOP officials said. They said the cuts might be accomplished through a
gradual cap on federal spending, leaving states time to adjust by raising
state
taxes or lowering benefits over 10 years.
Medicaid experts said the Bush proposal probably will be structured to show
continued increases in federal outlays for Medicaid, but at less than the
inflation rate.
The federal government supplements state spending for the services Medicaid
covers, with the federal rate ranging from 50 percent to 77 percent of
benefit
costs.
DiVall said that only 7 percent of the Americans she polled think the
government is spending too much on Medicare, and only 6 percent say the same
about
Medicaid. That contrasts with 59 percent who favor reductions in tax cuts
for
those with more than $200,000 a year in taxable income, according to DiVall.
Medicaid costs, like other health costs, are being driven higher by
inflation, an increase in prescription drug use and costs, and expanding
enrollment,
according to Diane Rowland, executive director of the private Kaiser
Commission
on Medicaid and the Uninsured.
A new federal report said that Medicaid is "excessively overpaying" for
prescription drugs. Five large retail pharmacies, purchasing five widely
prescribed
generic drugs, received more than twice as much reimbursement from Medicaid
as the drugs cost, according to a study by the Department of Health and
Human
Services inspector general.
"The system is broken and needs to be fixed," said Rep. Joe Barton, R-Texas,
chairman of the Energy and Commerce Committee. "The federal government could
save hundreds of millions of dollars per year if states would bring drug
reimbursement more in line with what it actually costs pharmacies and other
health
care providers to purchase these drugs."
Governors have long asked Washington for more flexibility in running
Medicaid. Now, if the president and congressional Republicans get their way,
governors
will likely get what they asked for.
For two straight years, House Republicans approved a measure that would put
a
cap on federal spending on Medicare, while at the same time giving states
more control over how the money would be spent.
But there were strings attached: shrinking money from Washington to pay the
bill. For the first time this year, states are expected to spend more on
Medicaid than on elementary or secondary education, according to the
National
Association of State Budget Officers.
Projections are that Medicaid spending will rise in the next few years as
the
baby boom generation requires more nursing home care, said Kathryn Kotulla,
director of health policy for the American Public Health Services
Association.
About the writer:
The Bee's Lawrence M. O'Rourke can be reached at (202) 383-0012 or
[log in to unmask]



Donna Martinez
"The world is dangerous not because of those who do harm, but because of
those who look at it without doing anything." - Albert Einstein