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Akron Univ. School of Law

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Wednesday, July 20, 2005

NGA reaches consensus on Medicaid

After six months of negotiations, the National Governor's Association, with the support of all 50 governors, has reached a consensus on Medicaid changes.  According to the LA Times, the governors' Medicaid plan would allow states to demand co-payments from the poor, the disabled, and women and children, as well as add tools to prevent seniors from giving relatives assets in order to qualify for Medicaid-funded long term care.  Their plan will give states the ability to experiment with more effective ways to deliver health care and control its cost. 

The governors are also discussing the new Medicare changes which, according to Democrat Governor of Virginia Mark R. Warner, would unfairly force states to pay part of the new prescription drug benefit, costing states hundreds of millions of dollars. They focused on the small portion of the new prescription drug policy that would affect people who are poor enough to qualify for Medicaid and old enough to qualify for Medicare.  Under the new Medicare law, the federal government nominally takes over responsibility for this group and requires states to continue to pay the overwhelming majority of the bill for their drugs by sending cash to Washington.  Many governors said this would require states to pay more than before, and they argue that the federal government should pay the costs of this group, which are significantly higher per person than for the rest of the Medicaid population. According to the AP,  Texas Governor Rick Perry vetoed the entire $444 million his state was supposed to send to the federal government to pay for drug benefits for the next two years.  Other states are contemplating lawsuits and other possible options.   

The overall goal of building group consensus is to reduce growth of Medicaid by $10 billion over the next five years. The governors discussed methods to contain costs, including giving patients greater understanding of their actual treatment costs and creating a catastrophic coverage plan.  Henry Simmons, president of the National Coalition on Health Care, said that "the rising costs are not only making health care more expensive, they are also hurting the states' economies and putting U.S. businesses at a competitive disadvantage with foreign firms." 

Lindley Bain contributed mightily to this post.  [tm]

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