http://archive.nytimes.com/2003/02/21/opinion/21FRI1.html

Seducing the Governors 

After Congress failed to create a national health care plan, Medicaid
became the default solution to the crisis of the growing number of
uninsured Americans. Expanding Medicaid was a success in terms of meeting
a critical need. But the price is now staggering strapped state
governments.

The Bush administration is responding with an offer of modest help,
essentially a loan against future Medicaid payments � but there is a
catch. To get the aid, states must agree to radical changes in their
Medicaid plans, which will eventually take the federal government off the
hook for some � and perhaps much � of its share of the costs. At bottom,
Washington wants to limit its long-term responsibility for the only kind
of health program many Americans can afford. And it's planning to bribe
the governors to go along. This is outrageously unfair. Any federal aid
should be made available to all states, even those that want to maintain
the current structure of their Medicaid programs.

Medicaid was originally intended mainly for poor children and the
disabled, but most states have expanded it to include the families of the
working poor or near-poor and elderly people who could not afford to fill
in the gaps in their Medicare coverage. It grew, almost without notice,
into the largest health insurance program in the country. It now covers
more people and spends more money than Medicare. The federal government
picks up from 50 percent to 77 percent of the tab, depending on a state's
per capita income, with state revenues paying for the rest.

Some states are already cutting back on Medicaid in order to save money �
ramping down their already low payments to hospitals and nursing homes,
and lopping off people or benefits they added in better times. By one
count, about a million low-income people could lose Medicaid coverage
under cutbacks already adopted by states or proposed by their governors.

The federal government should be trying to find ways to keep people who
would otherwise be uninsured from falling out of the Medicaid program. It
makes sense to give states more flexibility to require co-payments,
spread their limited resources among a wider group of beneficiaries and
pursue cost-saving efforts like encouraging people to use cheaper home
health care instead of nursing homes. What Washington should not do is
try to sneak out of the federal obligation to support the system. That's
what a critical part of the Bush proposal amounts to. Participating
states would receive more money than usual for the first seven years,
then the sum would drop below normal for the next three years. In the
end, the states would be left with a capped annual lump sum that might
not rise fast enough to meet need in times of recession.

Most governors are near-frantic with budget worries right now, and some
of them might calculate cynically that they will probably not still be in
office in seven years when federal aid starts dropping. But the current
expanded Medicaid system does not deserve to be dismantled, even over the
long run. If it really wants to help, the administration could give
Medicaid a much larger infusion of money by simply providing prescription
drug coverage for all Medicare recipients, thus relieving Medicaid of
paying those costs for the elderly poor.

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