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Medicaid expansion stalls health talks

- The Washington Times - Tuesday, September 15, 2009

A proposed expansion of Medicaid, the health care program for lower-income Americans, has emerged as one of the last sticking points in the Senate Finance Committee's health care reform bill, with governors and state legislatures around the country worried they're going to get left with the tab.

Proposals in the House and Senate would expand Medicaid eligibility to 133 percent of the federal poverty level, potentially putting millions of new people on the public health program for the poor younger than 65.

As the Senate Finance Committee's "gang of six" tries to wrap up its health care reform bill, it is also trying to determine how much of those new costs should be paid by the states and how much by the federal government.

The gang of six - three Republicans and three Democrats - hopes to finish negotiations this week. Committee Chairman Max Baucus, Montana Democrat, said he is likely to issue a bill Tuesday or Wednesday, but it's still unclear whether Republicans are going to sign on. Mr. Baucus said he plans to continue to lobby Republican support, even after the bill is released.

Other points of dispute for the group include medical malpractice reform; drafting a verification system to prevent illegal immigrants from obtaining government insurance subsidies; and preventing federal funding from going to abortions.

President Obama's plan got a bit of good news Monday, as a new survey by pollster John Zogby found a large consensus in the country on eight major health care issues, although in some cases the majority favors items not in the president's blueprint. And Mr. Obama's much-touted speech last week to Congress helped his cause.

According to a survey of 4,426 likely voters, 78.5 percent say they back tort reform - tentatively embraced in Mr. Obama's speech, and 82.8 percent of voters think that allowing out-of-state health-insurance purchases may lower premium costs.

Mr. Zogby said the speech improved Mr. Obama's standing among skeptical independents - though there is still plenty of work to do.

"Obama's speech boosted his approval by nine percentage points with the all-important independents - but not as much as needed," Mr. Zogby told The Washington Times. "Even with this post-speech boost, 54 percent of independents still disapprove of his job performance."

The Medicaid expansion plan is designed to extend health care access to more of the poor, a population that often doesn't get preventive care and ends up getting treated for routine medical problems in hospital emergency rooms. If the individual can't pay the hospital bill, those costs get "shifted" by the hospital or doctor to patients who can pay.

The proposal would extend Medicaid access to 133 percent of the federal poverty line, which in 2009 would mean that individuals making less than $14,404, or families of four making less than $29,327, would be eligible.

The National Governors Association (NGA) and the National Conference on State Legislatures have cautioned that the states cannot afford to take on new costs, particularly in a struggling economy.

"Any increase in the mandatory minimum eligibility threshold will cost states tens of billions of dollars per year," NGA Executive Director Ray Scheppach told a House panel in June.

States with spiking unemployment rates, such as Michigan, would be hit hardest.

Michigan Gov. Jennifer M. Granholm "recognizes there needs to be a shared responsibility in health reform ... from both federal and state," her spokeswoman, Megan Brown said, "and we look forward to working with the president to get health reform done this year."

Other states, such as Rhode Island, would be barely impacted by the change. There, adults with children are eligible until their incomes are 175 percent over the poverty rate, and children are eligible until their parents' income reaches 225 percent of the poverty rate - well above the proposed federal limit.

The gang of six is expected to hold a conference call about the Medicaid expansion proposal with a group of governors on Tuesday.

Republicans in the gang of six - Sen. Michael B. Enzi of Wyoming, Sen. Charles E. Grassley of Iowa and Sen. Olympia J. Snowe of Maine - have voiced concern over saddling the cash-strapped states with additional costs.

"Sen. Enzi ... believes that approach to covering the uninsured fails on all counts by creating a new, unfunded mandate for state governments, and by putting folks who need health care the most into a federally managed, waste-ridden program already desperately in need of reform," his spokesman said.

Mr. Baucus has also expressed concern over the impact on state budgets. He insisted Monday that the states would not be left with much to pay for, but declined to reveal specifics of how to avoid the extra costs.

"States, I think, are going to be pleasantly surprised because there are going to be some additional costs, but much less than we originally expected," he said. "The Medicaid costs with expansion are not going to complicate near as much as we originally feared because of" other programs, such as more generous drug rebates and changes to the state Children's Health Insurance Program.

The nonpartisan Congressional Budget Office found that the expansion, as described in the House health care bill, would increase federal outlays for Medicaid by $438 billion over a 10-year-period. Mr. Obama said again Monday in a New York speech that he would not sign off on a bill that isn't fully paid for, a stance shared by Senate Democrats.

Under current law, Medicaid eligibility varies widely by state, with some states providing access to the program at 175 percent of the poverty rate and some offering little more than the federal requirements. States administer the program but are reimbursed by the federal government.