JUNE 15, 2005 -- The nation's governors on Wednesday brought their recommendations for an overhaul of the Medicaid program to Capitol Hill, seeking flexibility to change what types of medical benefits are covered and asking beneficiaries to pay more for them.
On a day that effectively marked the opening of what is likely to be an historic debate this summer over the fate of the Medicaid health care entitlement for the poor, House Democrats condemned Republicans on Wednesday for launching what they called an "immoral" attempt to fund tax cuts for the rich by increasing the suffering of the most vulnerable Americans.
In unusually sharp and angry attacks at a hearing that began House consideration of Medicaid revisions urged by state governors, House Democrats appeared determined to fight hard to block GOP attempts to remake a program that lies at the heart of the Democratic ideology and sense of morality.
Congress and an administration-appointed commission soon will begin identifying ways to pare $10 billion from Medicaid over five years. With Medicaid costs now the largest and fastest-growing component of state budgets, governors must find ways to contain Medicaid spending, the governors told Congress.
The House Democrats' arguments may have been weakened by the declaration of fellow Democrat Virginia Governor Mark Warner, the chairman of the National Governors Association (NGA), that Medicaid in its current form is unsustainable apart from the issue of GOP budget priorities.
And in testimony before the Senate Finance Committee where the governors also appeared Wednesday to discuss their Medicaid recommendations, NGA vice chairman Mike Huckabee, R-Ark., called Medicaid "a 45-rpm program in a MP3 world."
Governors United in Effort
Before the House Commerce panel, Huckabee depicted Democratic and Republican governors as united in their conviction that Medicaid no longer can continue in its current form, a contention Warner did not dispute. "We truly do have a bipartisan proposal before you," Warner said.
"I want to point out that budgets are moral documents," Rep. Henry A. Waxman, D-Calif. said in his opening statement. "We have a budget I think is immoral." Waxman said each member of the committee has a responsibility to ask what happens to the nation's most vulnerable citizens because of changes to Medicaid.
Michigan Rep. John D. Dingell, the ranking Energy and Commerce Democrat, faulted Chairman Joe L. Barton, R-Texas, for not inviting witnesses representing the elderly, children, and pregnant women to assess the impact of a set of seven revisions unveiled by the NGA.
The governors' proposals would seek higher rebates from drug manufacturers, increase the use of generics, and institute tiered co-payments for beneficiaries. The NGA plan would also make it more difficult for individuals to transfer assets in order to avoid paying for long-term care services, a trend they say is shifting more of those costs to the federal and state governments.
The plan would give states the option to increase cost-sharing for Medicaid beneficiaries and give states greater flexibility in benefit design. The governors also urged Congress to simplify the federal waiver process and require the Department of Health and Human Services to "stand by states" if a waiver is challenged in court.
Dingell said proposals requiring Medicaid patients to pay more out of pocket for health care "will probably result in no services for many." Equally troubling, he said, are NGA-proposed changes that would take benefits away from children. In the end, he warned, "the nation will pay the social costs" of such treatment of children.
Massachusetts Democrat Edward J. Markey asked angrily why Republicans don't first figure out how to protect "babies and grandmothers" and then fund tax cuts for the rich with whatever money is left over.
"I simply don't think Medicaid is in need of reform," said Illinois Democrat Bobby L. Rush, adding that reform always seems to be reserved in the current Congress for programs that aid the poor and vulnerable.
"We sit here with salaries of more than $150,000 a year, we have health care subsidized by the American taxpayer, and we are taking health care from the most vulnerable among us," said Ohio Democrat Ted Strickland, his voice raised. "It is a moral issue. Jesus said, 'as you have done it unto the least of these, you have done it unto me.' "
Defending Change
Republicans countered that doing nothing is not an option. Barton's face tensed when Dingell complained about the lack of witnesses but reacted by assuring Dingell that the poor and vulnerable would be heard from in a series of Medicaid hearings the committee plans leading to a September markup on an overhaul package.
"Some will say that any change to the system they love will hurt the poor," Barton said in his opening statement. "The critics conveniently ignore the fact that the system is already changing as states try to avoid ruin."
Between 2002 and 2005, Barton said, all states reduced provider rates and implemented drug cost controls; 38 states reduced eligibility; and 34 states reduced benefits. This year, hundreds of thousands of beneficiaries will lose Medicaid eligibility or face reduced benefits in states such as Tennessee, Missouri, and Mississippi, he said.
"We must do something because doing nothing hurts Medicaid patients every day. I want to save Medicaid," Barton said, adding that "if we cannot make Medicaid more affordable to states and the federal government, we will have put the beneficiaries who depend on the program at grave risk."
Rep. Nathan Deal, R-Ga., took exception to the criticism that overhauling Medicaid picks on the most vulnerable Americans. State waivers already put in place by Republicans "have given us the ability to put the safety net under people who didn't have it," he said.
But states are also dropping beneficiaries from the rolls, other lawmakers said. Rep. Marsha Blackburn, R-Tenn., noted that some 300,000 beneficiaries are being dropped for TennCare, which "has proven to be too much for our state's budget to bear.
Before Energy and Commerce, Warner stuck to a line of testimony that gave little succor to fellow Democrats. "We've got to deal with this issue now," he declared. "It's going to get exponentially worse over the next decade." Warner added that he found it "frustrating" that critics frame the changes as harming people in need.
But Rep. Sherrod Brown, D-Ohio, pressed Warner on apparent inconsistencies in his support for beneficiary cost-sharing, saying the Virginia governor had dropped a plan for charging premiums in the state's Children's Health Insurance Program.
And Waxman faulted Warner for "timidity" in his set of recommended revisions, noting the absence of any proposal to increase federal matching payments as a way out of the Medicaid financial crisis.
But NGA's increasingly detailed recommendations for overhauling Medicaid, summarized in a 13-page document, coupled with apparently wide gubernatorial bipartisan support for the changes, may breathe life into prospects this year for a congressional overhaul. Both Warner and Huckabee said they favor legislation this year.
One of the interesting subplots of the Medicaid hearings this summer will be Barton's level of success in keeping rising tensions over Medicaid under control. Although the committee is sharply partisan on the left and right, relationships between Democrats and Republicans have been cordial.
At the Senate Finance Committee hearing, Sen. Blanche Lincoln, D-Ark., said charging low-income people more for their medical care could mean "they don't get the care they need." Huckabee responded that the lowest-income families would not have to pay more than 5 percent of their income on health care.
Sen. Max Baucus, D-Mont., said he feared that benefits for mandatory populations might be in jeopardy under the governors' plan, but Huckabee said that was not the case.
Democrats Sen. John Kerry of Massachusetts and Sen. John D. Rockefeller IV, D-W.Va., urged Warner and Huckabee to back Democrats' quest to roll back tax cuts for Americans earning $300,000 or more a year. Taking that step that would provide enough money to provide health care coverage for children who do not have it and also return $6 billion to states, Kerry said.
"That is the choice because this year we are going to vote to make them permanent," Rockefeller said.
Warner said Kerry's plan was "nice" but would do little to respond to rising costs of long-term care.
Sen. Gordon H. Smith, R-Ore., asked the governors to recommend which of their proposals would help lawmakers make the $10 billion target for Medicaid spending reductions. Warner said governors want to work with Congress to decide which elements of their plan should be implemented.
The National Center for Policy Analysis, a conservative-leaning think tank, said the NGA would not go far enough to control rising Medicaid expenditures.
"States should be allowed to innovate to hold down costs but also be held accountable for expenses and results," said Devon Herrick, the center's senior fellow.